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On January 1, 2017, Larmer Corp The Following Exchange Rates Were in Effect During 2017

question 62

Essay

On January 1, 2017, Larmer Corp. (a Canadian company) purchased 80% of Martin Inc, an American company, for US$50,000.
Martin's book values approximated its fair values on that date except for plant and equipment, which had a fair value of US$30,000 with a remaining life expectancy of 5 years. A goodwill impairment loss of US$1,000 occurred during 2017. Martin's January 1, 2017 Balance Sheet is shown below (in U.S. dollars): $\begin{array} { | l | l | } \hline \text { Current Monetary Assets } & \$ 50,000 \\\hline \text { muentory } & \$ 40,000 \\\hline \text { Plant and Equipment } & \$ 25,000 \\\hline \text { Total Assets } & \$ 115,000 \\\hline & \\\hline \text { Current Liabilities } & \$ 45,000 \\\hline \text { Bonds Pay able (maturity: January 1, 2022) } &\$ 20,000\\\hline \text { Common Shares } & 30,000\\\hline \text { Retained Earnings } & \$ 20,000\\\hline \text { Total Labilities and Equity } &\$ 115,000 \\\hline & \\\hline\end{array}$ The following exchange rates were in effect during 2017:
$\begin{array} { | l | l | } \hline \text { January } 1,2017 : &U S \$ 1 = C D N \$ 1.3260 \\\hline \text { Average for } 2017 : & US \$ 1 = C D N \$ 1.3360 \\\hline \text { Date when Inventory Purchased: } & U S \$ 1 = \text { CDN } \$ 1.34 \\\hline \text { December } 31,2017 : & US \$ 1 = \text { CDN } \$ 1.35 \\\hline & \\\hline\end{array}$ Dividends declared and paid December 31, 2017.
The financial statements of Larmer (in Canadian dollars) and Martin (in U.S. dollars) are shown below:
Balance Sheets
$On January 1, 2017, Larmer Corp. (a Canadian company) purchased 80% of Martin Inc, an American company, for US$50,000. Martin's book values approximated its fair values on that date except for plant and equipment, which had a fair value of US$30,000 with a remaining life expectancy of 5 years. A goodwill impairment loss of US$1,000 occurred during 2017. Martin's January 1, 2017 Balance Sheet is shown below (in U.S. dollars): \begin{array} { | l | l | } \hline \text { Current Monetary Assets } & \$ 50,000 \\ \hline \text { muentory } & \$ 40,000 \\ \hline \text { Plant and Equipment } & \$ 25,000 \\ \hline \text { Total Assets } & \$ 115,000 \\ \hline & \\ \hline \text { Current Liabilities } & \$ 45,000 \\ \hline \text { Bonds Pay able (maturity: January 1, 2022) } &\$ 20,000\\ \hline \text { Common Shares } & 30,000\\ \hline \text { Retained Earnings } & \$ 20,000\\ \hline \text { Total Labilities and Equity } &\$ 115,000 \\ \hline & \\ \hline \end{array} The following exchange rates were in effect during 2017: \begin{array} { | l | l | } \hline \text { January } 1,2017 : &U S \$ 1 = C D N \$ 1.3260 \\ \hline \text { Average for } 2017 : & US \$ 1 = C D N \$ 1.3360 \\ \hline \text { Date when Inventory Purchased: } & U S \$ 1 = \text { CDN } \$ 1.34 \\ \hline \text { December } 31,2017 : & US \$ 1 = \text { CDN } \$ 1.35 \\ \hline & \\ \hline \end{array} Dividends declared and paid December 31, 2017. The financial statements of Larmer (in Canadian dollars) and Martin (in U.S. dollars) are shown below: Balance Sheets -Translate Martin's 2017 Income Statement into Canadian dollars if Martin is considered to be an integrated foreign subsidiary (i.e., the functional currency of the foreign operation is the same as the parent).$
-Translate Martin's 2017 Income Statement into Canadian dollars if Martin is considered to be an integrated foreign subsidiary (i.e., the functional currency of the foreign operation is the same as the parent).

Definitions:

Platelets

Small, disc-shaped blood cells important in blood clotting and preventing hemorrhage.

Pulmonary Circuit

The path of blood flow from the heart to the lungs for oxygenation and back to the heart.

Pulmonary Veins

The veins that transfer oxygenated blood from the lungs to the left atrium of the heart.