ship Inc.

Trial Balance Translation

a.
December 31, 20X5

Balance Exchange
Item Kroner Rate
Cash 154000 0.21
Accounts Receivable (net) 205,000 0.21
Inventory 280,000 0.21
Property, Plant, and Equipment 614,000 0.21
Cost of Goods Sold 417,000 0.2
Operating Expenses 117,000 0.2
Depreciation Expense 64,000 0.2
Dividends Paid 54,000 0.19
Total Debits 1905000

Accumulated Depreciation 159000 0.21

Accounts Payable 96,000 0.21
Notes Payable 192,000 0.21
Common Stock 430,000 0.18
Retained Earnings 270,000 0.18
Sales 758000 0.2
Total 1905000
Accumulated Other Comprehensive
Income — Translation Adjustment
(credit)
Total Credits

b
Date Accounts debit credit

Jan-01 Investment in Ship company $ 162,000

cash $ 162,000

Jul-01 Cash $ 10,260

Investment in Ship company $ 10,260

Dec-03 Investment in Ship company $ 32,000

income from subsidiary $ 32,000
(758000-417000-117000-64000)*0.2

Investment in Ship company $ 21,520

OCI-Translation Adjustement $ 21,520

Investment in Ship company $ 6,000

 income from subsidiary $ 6,000

Investment in Ship company $ 5,700

OCI-Translation Adjustement $ 5,700
 Working Notes

Investment value $ 162,000

Book value $ 126,000
excess $ 36,000
attributed to
PPE $ 18,000
patent $ 18,000

Plant Property and euipment

difference 100000 0.18
Amortization -10000 0.2
90000

translation on balance sheet date 90000 0.21

difference

Patent
difference 100000 0.18
Amortization -20000 0.2
80000

translation on balance sheet date 80000 0.21

difference

Ques 3
Taft’s consolidated comprehensive income for 20X5:

1 Income from Taft’s operations for 20X5, exclusive

of income from the Norwegian subsidiary 243000
2 Add: Income from the Norwegian subsidiary for 20X5 $ 32,000
3 Deduct: Amortization of differential for 20X5 $ (6,000)
Equals Net Income $ 269,000
4 Add: Translation Adjustment ($21,380 + $6,260) $ 27,220
Equals Consolidated Comprehensive Income $ 296,220

Ques 4
Taft’s consolidated stockholders’ equity at December 31, 20X5

1 Taft’s stockholders’ equity at Jan. 1, 20X5 $ 3,500,000

2 Add: Net income for 20X5 $ 269,000
3 Deduct: Dividends declared by Taft during 20X5 $ (170,000)
4 Add: Accumulated other comprehensive income:
Foreign currency translation adjustment $ 27,220
Consolidated Stockholders’ Equity at Dec. 31, 20X5 $ 3,626,220
 Balance
Dollars
$ 32,340
$ 43,050
$ 58,800
$ 128,940
$ 83,400
$ 23,400
$ 12,800
$ 10,260
$ 392,990

$ 33,390
$ 20,160
$ 40,320
$ 77,400
$ 48,600
$ 151,600
$ 371,470

$ 21,520
$ 392,990
$ 18,000
$ (2,000)
$ 16,000

$ 18,900
$ 2,900

$ 18,000
$ (4,000)
$ 14,000

$ 16,800
$ 2,800
 ship Inc.
Trial Balance Translation
a.
December 31, 20X5

Balance Exchange
Item Kroner Rate
Cash 153000 0.21
Accounts Receivable (net) 201,000 0.21
Inventory 279,000 0.21
Property, Plant, and Equipment 609,000 0.21
Cost of Goods Sold 418,000 0.2
Operating Expenses 113,000 0.2
Depreciation Expense 70,000 0.2
Dividends Paid 51,000 0.19
Total Debits 1894000

Accumulated Depreciation 155000 0.21

Accounts Payable 93,000 0.21
Notes Payable 205,000 0.21
Common Stock 430,000 0.18
Retained Earnings 270,000 0.18
Sales 741000 0.2
Total 1894000
Accumulated Other Comprehensive
Income — Translation Adjustment
(credit)
Total Credits

b
Date Accounts debit credit

Jan-01 Investment in Ship company $ 165,600

cash $ 165,600

Jul-01 Cash $ 9,690

Investment in Ship company $ 9,690

Dec-03 Investment in Ship company $ 28,000

income from subsidiary $ 28,000
(741000-418000-113000-70000)*0.2

Investment in Ship company $ 21,380

OCI-Translation Adjustement $ 21,380

Investment in Ship company $ 6,800

 income from subsidiary $ 6,800

Investment in Ship company $ 6,260

OCI-Translation Adjustement $ 6,260
 Working Notes

Investment value $ 165,600

Book value $ 126,000
excess $ 39,600
attributed to
PPE $ 18,000
patent $ 21,600

Plant Property and euipment

difference 100000 0.18
Amortization -10000 0.2
90000

translation on balance sheet date 90000 0.21

difference

Patent
difference 120000 0.18
Amortization -24000 0.2
96000

translation on balance sheet date 96000 0.21

difference

Ques 3
Taft’s consolidated comprehensive income for 20X5:

1 Income from Taft’s operations for 20X5, exclusive

of income from the Norwegian subsidiary 265000
2 Add: Income from the Norwegian subsidiary for 20X5 $ 28,000
3 Deduct: Amortization of differential for 20X5 $ (6,800)
Equals Net Income $ 286,200
4 Add: Translation Adjustment ($21,380 + $6,260) $ 27,640
Equals Consolidated Comprehensive Income $ 313,840

Ques 4
Taft’s consolidated stockholders’ equity at December 31, 20X5

1 Taft’s stockholders’ equity at Jan. 1, 20X5 $ 3,500,000

2 Add: Net income for 20X5 $ 286,200
3 Deduct: Dividends declared by Taft during 20X5 $ (110,000)
4 Add: Accumulated other comprehensive income:
Foreign currency translation adjustment $ 27,640
Consolidated Stockholders’ Equity at Dec. 31, 20X5 $ 3,703,840
 Balance
Dollars
$ 32,130
$ 42,210
$ 58,590
$ 127,890
$ 83,600
$ 22,600
$ 14,000
$ 9,690
$ 390,710

$ 32,550
$ 19,530
$ 43,050
$ 77,400
$ 48,600
$ 148,200
$ 369,330

$ 21,380
$ 390,710
$ 18,000
$ (2,000)
$ 16,000

$ 18,900
$ 2,900

$ 21,600
$ (4,800)
$ 16,800

$ 20,160
$ 3,360
b. Entries for 20X5:

Jan-01

Investment in Vikix Company Common 15

Cash
Purchase of Vikix Inc.

Jul-01
Cash

Investment in Vikix Company Common

Dividend received from foreign subsidiary:

$7,600 = NKr40,000 x $.19

Dec-31

Investment in Vikix Company Common 2

Income from Subsidiary

Equity in net income of foreign subsidiary:
$26,000 = Income of NKr130,000 x $.20

Investment in Vikix Company Common 2

Other Comprehensive Income —

Translation Adjustment
Parent's share of translation adjustment
from translation of subsidiary's accounts:
$21,500 x 1.00

Income from Subsidiary

 Investment in Vikix Company Common

Amortization of differential:
Proper $2,000
Patent   1,600
Total $3,600

Investment in Vikix Company Common

Other Comprehensive Income —

Translation Adjustment

Translation adjustment applicable

to the differential:
Proper $2,900
Patent   1,120
Total $4,020
151,200

151,200

7,600

7,600

26,000

26,000

21,500

21,500

3,600
 3,600

4,020

4,020
Taft’s consolidated comprehensive income for 2

1 Income from Taft’s operations for 20X5, exclusive

of income from the Norwegian subsidiary $  257,000 
2 Add: Income from the Norwegian subsidiary f 26,000 
3 Deduct: Amortization of differential for 20X5        (3,600)
Equals Net Income $  279,400 
4 Add: Translation Adjustment ($21,500 + $4,02      25,520 
Equals Consolidated Comprehensive Incom $  304,920 

Taft’s consolidated stockholders’ equity at December 31,

1 Taft’s stockholders’ equity at Jan. 1, 20X5 $3,500,000 

2 Add: Net income for 20X5 279,400 
3 Deduct: Dividends declared by Taft during 20 -100,000
4 Add: Accumulated other comprehensive income:
Foreign currency translation adjustment     25,520 

Consolidated Stockholders’ Equity at Dec. 31, $3,704,920