On January 2, 20X8, Polaris Company acquired a 100% interest in the capital stock of Ski Company for $3,100,000. Any excess cost over book value is attributable to a patent with a 10-year remaining life. At the date of acquisition, Ski's balance sheet contained the following information:  Foreign CurrencyUnits (FCU)Cash  40,000  Receivables (net)  150,000  Inventories (FIFO)  500,000  Plant and Equipment (net)  1,500,000  Total  2,190,000  Accounts Payable  200,000  Capital Stock  600,000  Retained Earnings  1,390,000  Total  2,190,000  Ski's income statement for 20X8 is as follows: Foreign CurrencyUnits (FCU)Revenues from Sales  1,010,000  Cost of Goods Sold  (590,000) Gross Margin  420,000  Operating Expenses (exclusive of

depreciation)  (120,000) Depreciation Expense  (200,000) Income Taxes  (40,000) Net Income  60,000  The balance sheet of Ski at December 31, 20X8, is as follows: Foreign CurrencyUnits (FCU)Cash  180,000  Receivables (net)  210,000  Inventories (FIFO)  520,000  Plant and Equipment (net)  1,300,000  Total  2,210,000  Accounts Payable  180,000  Capital Stock  600,000  Retained Earnings  1,430,000  Total  2,210,000  Ski declared and paid a dividend of 20,000 FCU on October 1, 20X8. Spot rates at various dates for 20X8 follow:   January 21 FCU=$1.50 October 11 FCU=$1.60 December 311 FCU=$1.70 Weighted Average1 FCU=$1.55 ?Assume Ski's revenues, purchases, operating expenses, depreciation expense, and income taxes were incurred evenly throughout 20X8.Refer to the above information. Assuming Ski's FCU is the functional currency, what is the amount of translation adjustment that appears on Polaris's consolidated financial statements at December 31, 20X8?

A. $405,884 debit
B. $398,500 credit
C. $419,184 credit
D. $416,884 credit


Answer: C

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Prudencio Corporation has provided the following information concerning a capital budgeting project:    After-tax discount rate 13%Tax rate 30%Expected life of the project 4 Investment required in equipment$160,000 Salvage value of equipment$0 Annual sales$400,000 Annual cash operating expenses$290,000 One-time renovation expense in year 3$40,000?The company uses straight-line depreciation on all equipment. Assume cash flows occur at the end of the year except for the initial investments. The company takes income taxes into account in its capital budgeting. The net present value of the entire project is closest to:See separate Exhibit 13B-1, to determine the appropriate discount factor(s) using the tables provided.

A. $139,420 B. $245,282 C. $85,282 D. $168,000

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A. goal B. philosophy C. code of conduct D. vision

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