Pritt Company purchased all the outstanding stock of Standy Company (a manufacturing company in Argentina)when the book value of Standy's net assets equaled their fair value.Standy's summarized balance sheet is shown below on January 1,2014,the date of acquisition,and on December 31,2014,when the exchange rates were $.25 and $.20,respectively.The average exchange rate for 2014 was $.23,and Standy paid dividends in 2014 amounting to 300,000 pesos when the exchange rate was $.21.

Required:
If Standy's functional currency and reporting currency are the Argentine peso,compute the change to other comprehensive income that would result from the translation of these financial statements at December 31,2014.

Question

Pritt Company purchased all the outstanding stock of Standy Company (a manufacturing company in Argentina)when the book value of Standy's net assets equaled their fair value.Standy's summarized balance sheet is shown below on January 1,2014,the date of acquisition,and on December 31,2014,when the exchange rates were $.25 and $.20,respectively.The average exchange rate for 2014 was $.23,and Standy paid dividends in 2014 amounting to 300,000 pesos when the exchange rate was $.21.
  
Required:
If Standy's functional currency and reporting currency are the Argentine peso,compute the change to other comprehensive income that would result from the translation of these financial statements at December 31,2014.

Quizplus · Accepted Answer

The Answer of Pritt Company purchased all the outstanding stock of Standy Company (a manufacturing company in Argentina)when the book value of Standy's net assets equaled their fair value.Standy's summarized balance sheet is shown below on January 1,2014,the date of acquisition,and on December 31,2014,when the exchange rates were $.25 and $.20,respectively.The average exchange rate for 2014 was $.23,and Standy paid dividends in 2014 amounting to 300,000 pesos when the exchange rate was $.21.
  
Required:
If Standy's functional currency and reporting currency are the Argentine peso,compute the change to other comprehensive income that would result from the translation of these financial statements at December 31,2014.

Pritt Company Purchased All the Outstanding Stock of Standy Company