On January 1,2014,Planet Corporation,a U.S.company,acquired 100% of Star Corporation of Bulgaria,paying an excess of 90,000 Bulgarian lev over the book value of Star's net assets.The excess was allocated to undervalued equipment with a three-year remaining useful life.Star's functional currency is the Bulgarian lev.Star's books are maintained in the functional currency.Exchange rates for Bulgarian lev for 2014 are:
Required:
1.Determine the depreciation expense stated in U.S.dollars on the excess allocated to equipment for 2014.
2.Determine the unamortized excess allocated to equipment on December 31,2014 in U.S.dollars.
3.If Star's functional currency was the U.S.dollar,what would be the depreciation expense on the excess allocated to the equipment for 2014?

Question

On January 1,2014,Planet Corporation,a U.S.company,acquired 100% of Star Corporation of Bulgaria,paying an excess of 90,000 Bulgarian lev over the book value of Star's net assets.The excess was allocated to undervalued equipment with a three-year remaining useful life.Star's functional currency is the Bulgarian lev.Star's books are maintained in the functional currency.Exchange rates for Bulgarian lev for 2014 are:  
Required:
1.Determine the depreciation expense stated in U.S.dollars on the excess allocated to equipment for 2014.
2.Determine the unamortized excess allocated to equipment on December 31,2014 in U.S.dollars.
3.If Star's functional currency was the U.S.dollar,what would be the depreciation expense on the excess allocated to the equipment for 2014?

Quizplus · Accepted Answer

The Answer of On January 1,2014,Planet Corporation,a U.S.company,acquired 100% of Star Corporation of Bulgaria,paying an excess of 90,000 Bulgarian lev over the book value of Star's net assets.The excess was allocated to undervalued equipment with a three-year remaining useful life.Star's functional currency is the Bulgarian lev.Star's books are maintained in the functional currency.Exchange rates for Bulgarian lev for 2014 are:  
Required:
1.Determine the depreciation expense stated in U.S.dollars on the excess allocated to equipment for 2014.
2.Determine the unamortized excess allocated to equipment on December 31,2014 in U.S.dollars.
3.If Star's functional currency was the U.S.dollar,what would be the depreciation expense on the excess allocated to the equipment for 2014?