Phim Inc., a U.S.company, owns 100% of Sera Corporation, a New Zealand company.Sera's equipment was acquired on the following dates (amounts are stated in New Zealand dollars as NZ$):
Jan.01, 2011 Purchased equipment for NZ$40,000
Jul.01, 2011 Purchased equipment for NZ$80,000
Jan.01, 2012 Purchased equipment for NZ$50,000
Jul.01, 2012 Sold equipment purchased on Jan.01, 2011 for NZ$35,000
Exchange rates for the New Zealand dollar on various dates are:
Sera's equipment has an estimated 5-year life with no salvage value and is depreciated using the straight-line method.Sera's functional currency and reporting currency are the New Zealand dollar.
Required:
1.Determine the value of Sera's equipment account on December 31, 2012 in U.S.dollars.
2.Determine Sera's depreciation expense for 2012 in U.S.dollars.
3.Determine the gain or loss from the sale of equipment on July 1, 2012 in U.S.dollars.

Question

Phim Inc., a U.S.company, owns 100% of Sera Corporation, a New Zealand company.Sera's equipment was acquired on the following dates (amounts are stated in New Zealand dollars as NZ$):
Jan.01, 2011 Purchased equipment for NZ$40,000
Jul.01, 2011 Purchased equipment for NZ$80,000
Jan.01, 2012 Purchased equipment for NZ$50,000
Jul.01, 2012 Sold equipment purchased on Jan.01, 2011 for NZ$35,000
Exchange rates for the New Zealand dollar on various dates are:
  Sera's equipment has an estimated 5-year life with no salvage value and is depreciated using the straight-line method.Sera's functional currency and reporting currency are the New Zealand dollar.
Required:
1.Determine the value of Sera's equipment account on December 31, 2012 in U.S.dollars.
2.Determine Sera's depreciation expense for 2012 in U.S.dollars.
3.Determine the gain or loss from the sale of equipment on July 1, 2012 in U.S.dollars.

Quizplus · Accepted Answer

The Answer of Phim Inc., a U.S.company, owns 100% of Sera Corporation, a New Zealand company.Sera's equipment was acquired on the following dates (amounts are stated in New Zealand dollars as NZ$):
Jan.01, 2011 Purchased equipment for NZ$40,000
Jul.01, 2011 Purchased equipment for NZ$80,000
Jan.01, 2012 Purchased equipment for NZ$50,000
Jul.01, 2012 Sold equipment purchased on Jan.01, 2011 for NZ$35,000
Exchange rates for the New Zealand dollar on various dates are:
  Sera's equipment has an estimated 5-year life with no salvage value and is depreciated using the straight-line method.Sera's functional currency and reporting currency are the New Zealand dollar.
Required:
1.Determine the value of Sera's equipment account on December 31, 2012 in U.S.dollars.
2.Determine Sera's depreciation expense for 2012 in U.S.dollars.
3.Determine the gain or loss from the sale of equipment on July 1, 2012 in U.S.dollars.

Phim Inc, a U