Solution 1 In 2015 Corbus Co a Canadian company created a foreign subsidiary called Snazzy Ltd by investing 2 000 000 CAD 800 000 FC in return for all
Solution In Corbus Co a Canadian company created a foreign subsidiary called Snazzy Ltd by investing CAD
Solution In Corbus Co a Canadian company created a foreign subsidiary called Snazzy
a Canadian company created a foreign subsidiary called Snazzy Ltd by investing CAD FC in return for all
Solution In Corbus Co a Canadian company created a foreign subsidiary
called Snazzy Ltd by investing CAD FC in return for all
Solution In Corbus Co a Canadian company created
Solution In Corbus Co
(Solution) 1 In 2015, Corbus Co., a Canadian company, created a foreign subsidiary called Snazzy Ltd. by investing $2,000,000 CAD (800,000 FC) in return for all...

Category: General
Words: 1050
Amount: $12
Writer:

Paper instructions

In 2015, Corbus Co., a Canadian company, created a foreign subsidiary called Snazzy Ltd. by investing $2,000,000 CAD (800,000 FC) in return for all of Snazzy’s common shares. In preparing to start operations, Snazzy acquired equipment for 960,000 FC and took out a 320,000 FC loan. Snazzy is committed to repaying the loan in 3 years. In 2016, Snazzy acquired a tract of land for 320,000 FC. All dividends were paid on December 31 of the years in which they were declared. Snazzy’s financial statements for its first 2 years of operations are presented below. Snazzy Ltd.Statement of Financial PositionAs of December 31(in FC)                                                                                                       2016                          2015Assets:Current assets:Cash                                                                                       $      48.000                $    256,000Accounts receivable                                                                     64,000                        48,000                                                                                                      112,000                      304,000Noncurrent assets:Land                                                                                             320,000                            -Equipment                                                                                   960,000                      960,000Accumulated amortization                                                        (192,000)                     (96,000)                                                                                                   1,088,000                     864,000Total assets                                                                           $ 1,200,000               $ 1,168,000Liabilities and shareholder’s equity:Current liabilities:Accounts payable                                                                         16,000                        32,000Noncurrent liabilities:Loan payable                                                                   320,000                      320,000                                                                                                      336,000                      352,000Shareholder’s equity:Share capital                                                                               800,000                      800,000Retained earnings                                                                      _64,000                      _16,000                                                                                                      864,000                      816,000Total liabilities and shareholder’s equity                            $ 1,200,000               $ 1,168,000 Snazzy Ltd.Statement of Comprehensive IncomeFor the year ended December 31(in FC)                                                                                                    2016                           2015             Revenue                                                                     $ 480,000                  $ 352,000            Expenses:                        Amortization                                                       96,000                        96,000                        Interest                                                                 64,000                        64,000                        Other expenses                                                192,000                      128,000                                                                                                   352,000                      288,000            Net and comprehensive income                             $ 128,000                  $   64,000 Snazzy Ltd.Statement of Changes in Equity – Retained Earnings SectionFor the year ended December 31(in FC)                                                                                                                 2016              2015 Retained earnings, beginning of year                                             $   16,000       $          -Net income                                                                                           128,000             64,000Dividends declared                                                                              (80,000)          (48,000)Retained earnings, end of year                                                       $   64,000       $    16,000 Selected exchange rates when the equipment was purchased                                  1FC = $2.30 CADwhen the loan was negotiated                                             1FC = $2.40 CADwhen the land was purchased                                             1FC = $1.90 CADaverage during 2015                                                            1FC = $2.20 CADDecember 31, 2015                                                             1FC = $2.00 CADAverage during 2016                                                            1FC = $1.70 CADDecember 31, 2016                                                             1FC = $1.50 CAD Required: Assume that Snazzy’s functional currency is the Canadian dollar. Translate Snazzy’s 2015 financial statements using the appropriate method. Independently calculate the translation gain/loss. Repeat (i) and (ii) for 2016. Assume that Snazzy’s functional currency is the FC. Translate Snazzy’s 2015 financial statements using the appropriate method. Independently calculate the translation gain/loss. Repeat (i) and (ii) for 2016.1 In 2015, Corbus Co., a Canadian company, created a foreign subsidiary called Snazzy Ltd. by investing $2,000,000 CAD (800,000 FC) in return for all of Snazzy’s common shares. In preparing to start operations, Snazzy acquired equipment for 960,000 FC and took out a 320,000 FC loan. Snazzy is committed to repaying the loan in 3 years. In 2016, Snazzy acquired a tract of land for 320,000 FC. All dividends were paid on December 31 of the years in which they were declared. Snazzy’s ±nancial statements for its ±rst 2 years of operations are presented below. ACCT451v12 Assignment 3 September 4, 2014

Answer

Get Essay Answer
1,200,000+ Questions
Satisfaction guaranteed