Black uses the cost method to account for its investment in White.
White purchased its building on December 31, Year 3.
The recoverable amount for goodwill at the end of Year 6 was FP720,000.
Dividends were declared and paid on July 1.
Foreign exchange rates were as follows:
Jan. 2, Year 1 …….. FP1 = $0.30
Dec. 31, Year 3…….. FP1 = $0.24
Dec. 31, Year 5…….. FP1 = $0.20
Average for Year 6…….. FP1 = $0.18
July 1, Year 6…….. FP1 = $0.17
Dec. 31, Year 6…….. FP1 = $0.15
(a) Compute the balances that would appear in the Year 6 consolidated financial statements for the following items, assuming that Whiteâ€™s functional currency is the Canadian dollar. Whiteâ€™s income before foreign exchange gains is $30,000, and the exchange gains from translating Whiteâ€™s separate-entity financial statements to Canadian dollars is $50,000.
(iii) Depreciation expense-building
(iv) Net income (excluding other comprehensive income)
(v) Other comprehensive income
(vi) Non-controlling interest on the income statement
(vii) Non-controlling interest on the balance sheet
(b) Compute the balances that would appear in the Year 6 consolidated financial statements for the same accounts as in Part (a), assuming that Whiteâ€™s functional currency is the foreign peso.