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Phi a US firm acquired 100 percent of Stu s outstanding stock at book value on January 1 2016 for $112000 Stu is a New Zealand based company and its functional currency is the US dollar

Phi, a U.S. firm, acquired 100 percent of Stu s outstanding stock at book value on January 1, 2016, for $112,000. Stu is a New Zealand-based company, and its functional currency is the U.S. dollar. The exchange rate for New Zealand dollars (NZ$) was $0.70 when Phi acquired its interest. Stu s stockholders equity on January 1, 2016, consisted of NZ$150,000 capital stock and NZ$10,000 retained earnings. The adjusted trial balance for Stu at December 31, 2016, is as follows: Debits Cash NZ......................................... $15,000 Accounts receivable-net ..................... 60,000 Inventories ..................................... 30,000 Prepaid expenses ............................. 10,000 Land .......................................... 45,000 Equipment .................................. 60,000 Cost of sales .................................. 120,000 Depreciation expense ...................... 12,000 Other operating expenses ................. 28,000 Dividends ................................... 20,000 NZ............................................. $400,000 Credits Accumulated depreciation NZ............... $22,000 Accounts payable .............................. 18,000 Capital stock ................................. 150,000 Retained earnings ........................... 10,000 Sales ........................................... 200,000 NZ..............................................

 

May 23 2020 View more View Less

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