On January 1, 20X8, Pullman Corporation acquired 75 percent interest in Steamship Company for $300,000. Steamship is a Norwegian company. The recording currency is the Norwegian kroner (NKr). The acquisition resulted in an excess of cost-over-book value of $25,000 due solely to a patent having a remaining life of 5 years. Pullman uses the fully adjusted equity method to account for its investment. Steamship's December 31, 20X8, trial balance has been translated into U.S. dollars, requiring a translation adjustment debit of $8,000. Steamship's net income translated into U.S. dollars is $35,000. It declared and paid an NKr 20,000 dividend on June 1, 20X8. Relevant exchange rates are as follows: January 1, 20X8NKrl=$0.20 June 1, 20X8NKrl=$0.23 December 31, 20X8NKrl=$0.24 Average for
20X8NKrl=$0.22 Assume the kroner is the functional currency.Based on the preceding information, in the journal entry to record the amortization of the patent for 20X8 on the parent's books, Investment in Steamship Company will be debited for:
A. $4,500
B. $5,000
C. $5,500
D. $3,000
Answer: C
You might also like to view...
BHP Billilton is an Australian mining company with operations in Brazil, Canada, South Africa, and the United States, among other countries. This company is a
A. multiregional conglomerate. B. multinational organization. C. global concern. D. multiregional firm. E. multinational corporation.
Which of the following could be a journal voucher?
a. general ledger cash disbursements update b. customer invoice c. receiving report d. purchase requisition
It is generally safe to write positive letters of recommendation for former employees
Indicate whether the statement is true or false.
Which among the following is the largest group of national advertisers in the United States?
A. Health care industry B. Automobile industry C. Retail industry D. Consumer electronics industry E. Real estate industry