Ginvold Co

question 31

Essay

Ginvold Co. began operating a subsidiary in a foreign country on January 1, 2013 by acquiring all of the common stock for §50,000 Stickles, the local currency. This subsidiary immediately borrowed §120,000 on a five-year note with ten percent interest payable annually beginning on January 1, 2014. A building was then purchased for §170,000 on January 1, 2013. 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 received. On October 1, §5,000 were paid for a repair made on that date and it was the only transaction of this kind for the year. A cash dividend of §6,000 was transferred back to Ginvold on December 31, 2013. The functional currency for the subsidiary was the Stickle (§). Currency exchange rates were as follows:
Prepare a balance sheet for this subsidiary in stickles and then translate the amounts into U.S. dollars.

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Definitions:

Selective Attention

The process of focusing on a particular object in the environment for a certain period, while simultaneously ignoring irrelevant information.

Feels Little Pain

A condition or state in which an individual has a significantly reduced sensitivity to pain, which can be due to genetic factors, neurological conditions, or other reasons.

Injured

The state of having physical harm or damage to the body, often resulting from accidents, violence, or sports.

Battle

is a combat between two or more armed forces or combatants, typically involving physical violence and strategy.