On January 2,2008,Johnson Company Acquired a 100% Interest in the Capital

question 53

Multiple Choice

On January 2,2008,Johnson Company acquired a 100% interest in the capital stock of Perth Company for $3,100,000.Any excess cost over book value is attributable to a patent with a 10-year remaining life.At the date of acquisition,Perth's balance sheet contained the following information:
Perth's income statement for 2008 is as follows:
The balance sheet of Perth at December 31,2008,is as follows:
Perth declared and paid a dividend of 20,000 FCU on October 1,2008.Spot rates at various dates for 2008 follow:
Assume Perth's revenues,purchases,operating expenses,depreciation expense,and income taxes were incurred evenly throughout 2008.

-Refer to the above information.Assuming Perth's local currency is the functional currency,what is the balance in Johnson's investment in foreign subsidiary account at December 31,2008,assuming use of the equity method?

• A)$3,216,500
• B)$3,560,000
• C)$3,568,300
• D)$3,577,694

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