Note to Instructor: This Exam Item Is a Continuation of Exercise

question 1

Essay

Note to Instructor: This exam item is a continuation of Exercise 5 and proceeds forward with Stripe's second year of operations.
Stripe Corporation, a British subsidiary of Polka Corporation (a U.S. company) was formed by Polka on January 1, 2014 in exchange for all of the subsidiary's common stock. Stripe has now ended its second year of operations on December 31, 2015. Relevant exchange rates are:
January 01, 2014 = 1£ = $1.60
April 01, 2014 = 1£ = $1.62
December 31, 2015 = 1£ = $1.57
2015 average rate = 1£ = $1.56
Stripe's adjusted trial balance is presented below for the calendar year 2015.
Required: Prepare Stripe's:
1. Remeasurement working papers;
2. Remeasured income statement; and
3. Remeasured balance sheet.

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Definitions:

Economic Profits

The difference between a firm's total revenues and its total costs, including both explicit and implicit costs, resulting in surplus gain.

Product Variety

The diversity of different items a firm, industry, or economy produces, providing consumers with multiple options to satisfy their preferences.

Graph Drawing

The process of representing data visually using plots and charts to make the information easier to understand.

Consumer Surplus

The difference between the total amount consumers are willing and able to pay for a good or service and the total amount they actually pay.