On January 2, 20X8, Johnson Company acquired a 100% interest in the capital stock of Perth 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, Perth's balance sheet contained the following information:
Perth's income statement for 20X8 is as follows:
The balance sheet of Perth at December 31, 20X8, is as follows:
Perth declared and paid a dividend of 20,000 FCU on October 1, 20X8. Spot rates at various dates for 20X8 follow:
Assume Perth's revenues, purchases, operating expenses, depreciation expense, and income taxes were incurred evenly throughout 20X8.

-Refer to the above information.Assuming the U.S.dollar is the functional currency,what is Johnson's remeasurement gain (loss)for 20X8? (Assume the ending inventory was acquired on December 31,20X8.)
A) $31,000 gain
B) $36,500 loss
C) $22,000 gain
D) $32,000 gain

Question

On January 2, 20X8, Johnson Company acquired a 100% interest in the capital stock of Perth 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, Perth's balance sheet contained the following information:
Perth's income statement for 20X8 is as follows:
   The balance sheet of Perth at December 31, 20X8, is as follows:
Perth declared and paid a dividend of 20,000 FCU on October 1, 20X8. Spot rates at various dates for 20X8 follow:
Assume Perth's revenues, purchases, operating expenses, depreciation expense, and income taxes were incurred evenly throughout 20X8.
  
-Refer to the above information.Assuming the U.S.dollar is the functional currency,what is Johnson's remeasurement gain (loss)for 20X8? (Assume the ending inventory was acquired on December 31,20X8.)
A) $31,000 gain 
B) $36,500 loss 
C) $22,000 gain 
D) $32,000 gain

Quizplus · Accepted Answer

The Answer of On January 2, 20X8, Johnson Company acquired a 100% interest in the capital stock of Perth 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, Perth's balance sheet contained the following information:
Perth's income statement for 20X8 is as follows:
   The balance sheet of Perth at December 31, 20X8, is as follows:
Perth declared and paid a dividend of 20,000 FCU on October 1, 20X8. Spot rates at various dates for 20X8 follow:
Assume Perth's revenues, purchases, operating expenses, depreciation expense, and income taxes were incurred evenly throughout 20X8.
  
-Refer to the above information.Assuming the U.S.dollar is the functional currency,what is Johnson's remeasurement gain (loss)for 20X8? (Assume the ending inventory was acquired on December 31,20X8.)
A) $31,000 gain 
B) $36,500 loss 
C) $22,000 gain 
D) $32,000 gain

On January 2, 20X8, Johnson Company Acquired a 100% Interest