60.1K

Verified Solution

Link Copied!

P$12-17$ Translation, Journal Entries, Consolidated Comprehensive Income, and Stockholders' Equity

On January $1,20$X$5,$ Taft Company acquired all of the outstanding stock of Vikix, Inc., a Norwe. gian company, at a cost of $$151,200.$ Vikix's net assets on the date of acquisition were $700,000$ kroner $($NKr$).$ On January $1,20$X$5,$ the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Vikix's property, plant, and equipment exceeded its book value by $$18,000.$ The remaining useful life of Vikix's equipment at January $1,20x5$ was $10$ years.

The remainder of the differential was attributable to a patent having an estimated useful life of $5$ years. Vikix's trial balance on December $31,205,$ in kroner, follows:

Additional Information

Vikix uses the FIFO method for its inventory. The beginning inventory was acquired on December $31,20$X$4,$ and ending inventory was acquired on December $15,20$X$5.$ Purchases of NKr$420,000$ were made evenly throughout $20x5.$

Vikix acquired all of its property, plant, and equipment on July $1,20x3,$ and uses straight$-$line depreciation.

Vikix's sales were made evenly throughout $20x5,$ and its operating expenses were incurred evenly throughout $20$ X$5.$

The dividends were declared and paid on July $1,20x5.$

Taft's income from its own operations was $$275,000$ for $20x5,$ and its total stockholders' equity on January $1,20x5,$ was $$3,500,000.$ Taft declared $$100,000$ of dividends during $20x5.$

Exchange rates were as follows:

$\backslash$table$[[$July $1,203,$NKr$1=$$$\mathrm{.}15$

Answer & Explanation Solved by verified expert

See Answer