REFERENCE: Ref.10_12 Ginvold Co.began Operating a Subsidiary in a Foreign Country on Country

question 3

Essay

REFERENCE: Ref.10_12
Ginvold Co.began operating a subsidiary in a foreign country on January 1,2008 by acquiring all of the common stock for §50,000.This subsidiary immediately borrowed §120,000 on a five-year note with ten percent interest payable annually beginning on January 1,2008.A building was then purchased for §170,000.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 made.On October 1,§5,000 were paid for a repair made on that date.A cash dividend of §6,000 was transferred back to Ginvold on December 31,2008.The functional currency for the subsidiary was the stickle.Currency exchange rates were as follows:
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-Prepare a balance sheet for this subsidiary in stickles and then translate these amounts into U.S.dollars.

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Definitions:

Dependent Variable

A variable in an experiment or model that is expected to change in response to manipulations of the independent variable(s).

Independent Variable

A variable in an experiment or study that is manipulated or changed by the researcher to observe its effect on the dependent variable.

Regression Equation

An equation that describes the statistical relationship between one dependent variable and one or more independent variables.

Slope

The measure of the steepness or incline of a line, representing the rate of change of the function.