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 Perth's net income for 20X8 in U.S.dollars (include the remeasurement gain or loss in Perth's net income)?
A) $238,000
B) $228,000
C) $219,500
D) $202,000

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 Perth's net income for 20X8 in U.S.dollars (include the remeasurement gain or loss in Perth's net income)?
A) $238,000 
B) $228,000 
C) $219,500 
D) $202,000

Quizplus · Accepted Answer

Perth's net income for 20X8 in U.S. dollars is $238,000. This includes the remeasurement gain of $16,000.

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