Parent Company Acquired a Subsidiary in Germany in 2009

question 26

Essay

Parent Company acquired a subsidiary in Germany in 2009.The subsidiary's balance sheet is stated in euros.When Parent Company acquired the subsidiary in 2009,a euro was worth $1.35.When the subsidiary earned its income during 2009-2014,the average exchange rate was $1.32.On December 31,2014,a euro is worth $1.20.
At December 31,2014,the subsidiary's assets were 1,000,000 euros; the liabilities were 500,000 euros,common stock was 400,000 euros and retained earnings was 100,000 euros.
Required:
Translate the subsidiary's balance sheet into dollars.

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Definitions:

Depreciation Expense

The allocated reduction in the value of a tangible asset over its useful life, reflecting wear and tear or obsolescence.

Straight-Line Depreciation

A strategy for apportioning an asset’s price equally over the duration of its usability.

Fiscal Year-End

The completion of a one-year, or 12-month, accounting period, used by governments and businesses for financial reporting and budgeting, which may or may not align with the calendar year.

Quarter Income Statement

A financial report that summarizes the revenues, expenses, and profits or losses of a company over a three-month period.