Financial Accounting > SOLUTIONS > ACCT2225 Accounting Applications 1. Financial Statement Calculations. (All)

ACCT2225 Accounting Applications 1. Financial Statement Calculations.

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ACCT2225 Accounting Applications 1. Financial Statement Calculations. On December 31, Year 1, Precision Manufacturing Inc. (PMI) of Edmonton purchased 100% of the outstanding ordinary shares of Sando... ra Corp. of Flint, Michigan. Sandora’s comparative statement of financial position and Year 2 income statement are as follows: STATEMENT OF FINANCIAL POSITION At December 31 Year 2 Year 1 Plant and equipment (net) US$ 6,600,000 US$ 7,300,000 Inventory 5,700,000 6,300,000 Accounts receivable 6,100,000 4,700,000 Cash 780,000 900,000 Total Assets US$19,180,000 US$19,200,000 Ordinary shares US$ 5,000,000 US$ 5,000,000 Retained earnings 7,480,000 7,000,000 Bonds payable—due Dec. 31, Year 6 4,800,000 4,800,000 Current liabilities 1,900,000 2,400,000 Total Liabilities & S/H Equity US$19,180,000 US$19,200,000 INCOME STATEMENT For the year ended December 31, Year 2 Sales US$30,000,000 Cost of purchases 23,400,000 Change in inventory 600,000 Depreciation expense 700,000 Other expenses 3,800,000 Total expenses 28,500,000 Profit US$ 1,500,000 Additional Information ● Exchange rates Dec. 31, Year 1 US$1 = C$1.10 Sep. 30, Year 2 US$1 = C$1.07 Dec. 31, Year 2 US$1 = C$1.05 Average for Year 2 US$1 = C$1.08 ● Sandora declared and paid dividends on September 30, Year 2. ● The inventories on hand on December 31, Year 2, were purchased when the exchange rate was US$1 = C$1.06. [Show More]

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