6 note to instructor this exam item is a continuation of exercise 5 and proceeds for 4307478

6 note to instructor this exam item is a continuation of exercise 5 and proceeds for 4307478

6) Note to Instructor: This exam item is a continuation of Exercise 5 and proceeds forward with Stripe's second year of operations.

Stripe Corporation, a British subsidiary of Polka Corporation (a U.S. company) was formed by Polka on January 1, 2011 in exchange for all of the subsidiary's common stock. Stripe has now ended its second year of operations on December 31, 2012. Relevant exchange rates are:

January 01, 2011 = 1£ = $1.60

April 01, 2011 = 1£ = $1.62

December 31, 2012 = 1£ = $1.57

2012 average rate = 1£ = $1.56

Stripe's adjusted trial balance is presented below for the calendar year 2012.

In Pounds

Debits:

Cash£ 172,000

Accounts receivable308,000

Notes receivable98,000

Building400,000

Land100,000

Depreciation expense10,000

Other expenses117,000

Salary expense376,000

Total debits£1,581,000

Credits

Accumulated depreciation£17,500

Accounts payable200,000

Common stock550,000

Retained earnings213,500

Sales revenue600,000

Total credits£1,581,000

Required: Prepare Stripe's:

1. Remeasurement working papers;

2. Remeasured income statement; and

3. Remeasured balance sheet.

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