Renta USA, Inc. formed a foreign subsidiary on January 1, 20X3; the subsidiary issued 15,000 of its no-par 10FC stock to Renta. The subsidiary's books are kept in their functional currency. Income earned in 20X3 and 20X4 totaled 100,000 FC and 120,000 FC, respectively. Dividends of 40,000 FC have been paid on December 31 of each year. In addition, 1,000 shares of common stock (no par) were issued on July 1, 20X4 for 20 FC each.
Exchange rates relating this foreign currency to U.S. dollars are as follows:
Required:
Calculate the owners' equity of the subsidiary on December 31, 20X4.

Question

Renta USA, Inc. formed a foreign subsidiary on January 1, 20X3; the subsidiary issued 15,000 of its no-par 10FC stock to Renta. The subsidiary's books are kept in their functional currency. Income earned in 20X3 and 20X4 totaled 100,000 FC and 120,000 FC, respectively. Dividends of 40,000 FC have been paid on December 31 of each year. In addition, 1,000 shares of common stock (no par) were issued on July 1, 20X4 for 20 FC each.
Exchange rates relating this foreign currency to U.S. dollars are as follows:
  Required:
Calculate the owners' equity of the subsidiary on December 31, 20X4.

Quizplus · Accepted Answer

The Answer of Renta USA, Inc. formed a foreign subsidiary on January 1, 20X3; the subsidiary issued 15,000 of its no-par 10FC stock to Renta. The subsidiary's books are kept in their functional currency. Income earned in 20X3 and 20X4 totaled 100,000 FC and 120,000 FC, respectively. Dividends of 40,000 FC have been paid on December 31 of each year. In addition, 1,000 shares of common stock (no par) were issued on July 1, 20X4 for 20 FC each.
Exchange rates relating this foreign currency to U.S. dollars are as follows:
  Required:
Calculate the owners' equity of the subsidiary on December 31, 20X4.