On January 1,2014,Paste Unlimited,a U.S.company,acquired 100% of Sticky Corporation of Italy,paying an excess of 112,500 euros over the book value of Sticky's net assets.The excess was allocated to undervalued equipment with a five year remaining useful life.Sticky's functional currency is the euro,and the books are kept in euros.Exchange rates for the euro for 2014 are:
Required:
1.Determine the depreciation expense on the excess allocated to equipment for 2014 in U.S.dollars.
2.Determine the unamortized excess allocated to equipment on December 31,2014 in U.S.dollars.
3.If Sticky'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,Paste Unlimited,a U.S.company,acquired 100% of Sticky Corporation of Italy,paying an excess of 112,500 euros over the book value of Sticky's net assets.The excess was allocated to undervalued equipment with a five year remaining useful life.Sticky's functional currency is the euro,and the books are kept in euros.Exchange rates for the euro for 2014 are:  
Required:
1.Determine the depreciation expense on the excess allocated to equipment for 2014 in U.S.dollars.
2.Determine the unamortized excess allocated to equipment on December 31,2014 in U.S.dollars.
3.If Sticky'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,Paste Unlimited,a U.S.company,acquired 100% of Sticky Corporation of Italy,paying an excess of 112,500 euros over the book value of Sticky's net assets.The excess was allocated to undervalued equipment with a five year remaining useful life.Sticky's functional currency is the euro,and the books are kept in euros.Exchange rates for the euro for 2014 are:  
Required:
1.Determine the depreciation expense on the excess allocated to equipment for 2014 in U.S.dollars.
2.Determine the unamortized excess allocated to equipment on December 31,2014 in U.S.dollars.
3.If Sticky's functional currency was the U.S.dollar,what would be the depreciation expense on the excess allocated to the equipment for 2014?