Advanced Accounting 11th Edition by Paul Fischer,William Tayler, Rita Cheng

Exercise 7

Translation of selected accounts and selected elimination entries. Techno Builders has acquired a 70% interest in the equity of a foreign company, Prefabco, whose functional currency is the FC. Although Prefabco began operations in June 2008 when 1 FC equaled $1.95, Techno did not acquire its interest until March 31, 2011, when 1 FC equaled $2.08. Techno paid 400,000 FC for its interest in Prefabco when the subsidiary's condensed preclosing trial balance was as follows:
Prepare a schedule to determine the balance in Techno's account ''Investment in Prefabco'' as of year-end 2013 and also prepare all of the entries that would be necessary to eliminate the investment account in a worksheet to consolidate the parent company and its subsidiary for the year 2013. Techno uses the simple equity method to account for its interest in the subsidiary.