Note to Instructor: This Exam Item Is Similar to Exercise

question 8

Essay

Note to Instructor: This exam item is similar to Exercise 3 except that the exchange rates have been changed and the temporal method is used instead of the current rate method.
The Polka Corporation,a U.S.corporation,formed a British subsidiary on January 1,2014 by investing 550,000 British pounds (£)in exchange for all of the subsidiary's no-par common stock.The British subsidiary,Stripe Corporation,purchased real property on April 1,2014 at a cost of £500,000,with £100,000 allocated to land and £400,000 allocated to the building.The building is depreciated over a 40-year estimated useful life on a straight-line basis with no salvage value.The U.S.dollar is Stripe's functional currency,but it keeps its records in pounds.The British economy does not experience high rates of inflation.Exchange rates for the pound on various dates are:
Stripe's adjusted trial balance is presented below for the year ended December 31,2014.
Required:
Prepare Stripe's:
1.Remeasurement working papers;
2.Remeasured income statement;and
3.Remeasured balance sheet.

---

Definitions:

Mean

The mean is the average of a set of numbers, calculated by dividing the sum of these numbers by the count of the numbers.

Observations

Data points or individual pieces of data collected through experimentation, measurement, or survey.

Expenditures

Money spent by an individual or organization for goods or services.

Mean Amount

The average value of a set of numbers, calculated by adding all the numbers together and then dividing by the count of those numbers.