Ginvold Co

question 72

Essay

Ginvold Co. began operating a subsidiary in a foreign country on January 1, 2021 by acquiring all of the common stock for §50,000 Stickles, the local currency. This subsidiary immediately borrowed §120,000 on a five-year note with ten percent interest payable annually beginning on January 1, 2022. A building was then purchased for §170,000 on January 1, 2021. This property had a ten-year anticipated life and no salvage value and was to be depreciated using the straight-line method. The building was immediately rented for three years to a group of local doctors for §6,000 per month. By year-end, payments totaling §60,000 had been received. On October 1, §5,000 were paid for a repair made on that date and it was the only transaction of this kind for the year. A cash dividend of §6,000 was transferred back to Ginvold on December 31, 2021. The functional currency for the subsidiary was the Stickle (§). Currency exchange rates were as follows: Prepare a statement of cash flows for this subsidiary in stickles and then translate the amounts into U.S. dollars.

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Definitions:

Minimum Wage

The lowest legal hourly wage that an employer can pay an employee, set by government law.

Minimum Wage

The lowest legally allowed payment that an employee can be paid for their labor.

Economists

Experts in economics who analyze and interpret economic trends, data, and policies to understand and predict financial and market behaviors.

Minimum Wage

The lowest legal hourly rate that workers can be paid by their employers, set to ensure a minimum standard of living for workers.