The Following Financial Information Is for DC Company, a Non-U

question 1

Essay

The following financial information is for DC Company, a non-U.S. firm with shares listed on a U.S. stock exchange:

If DC Company were following U.S. GAAP, the minority interest would have been classified as a liability instead of as part of stockholders' equity. In addition, minority interest income of $4,000 for the year would have been excluded from the computation of net income. Under U.S. GAAP the investment securities would have been classified as trading securities and the interest on financing of self-constructed assets would have been capitalized rather than expensed.
Prepare reconciliations of DC's reported stockholders' equity and net income to U.S. GAAP.

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Definitions:

R&D Expenditures

Money spent on research and development activities to innovate and improve products or processes.

Expected Return

The anticipated profit or loss from an investment, considering both the probability and the impact of all possible outcomes.

Cost of Funds

The interest rate that financial institutions and other lenders charge each other for the use of money, as in loans or deposits.

Income

The financial gain received by an individual or entity, typically measured on a per year basis, from work, investments, or other sources.