On January 2,20X8,Polaris Company Acquired a 100% Interest in the Capital

question 42

Multiple Choice

On January 2,20X8,Polaris Company acquired a 100% interest in the capital stock of Ski 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,Ski's balance sheet contained the following information:
Ski's income statement for 20X8 is as follows:
The balance sheet of Ski at December 31,20X8,is as follows:
Ski declared and paid a dividend of 20,000 FCU on October 1,20X8.Spot rates at various dates for 20X8 follow:
Assume Ski's revenues,purchases,operating expenses,depreciation expense,and income taxes were incurred evenly throughout 20X8.
-Refer to the above information.Assuming Ski's FCU is the functional currency,what is the balance in Polaris's investment in foreign subsidiary account at December 31,2008?

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

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Definitions:

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