Retained Earnings and Owner’s Equity Statement Preparation
Clarification for Foreign Exchange
| Foreign Currency Translation- |
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| Date | Exchange Rate | CA $ Cost of Land | Conversion to US $ | Comprehensive Income on Land | |||
| 12/31/2010 | 1.00529 | 5,250 | 5,278 | - | |||
| 12/31/2011 | 0.978857 | 5,250 | 5,139 | (139) | |||
| 12/31/2012 | 1.003179 | 5,250 | 5,267 | 128 | |||
| 12/31/2013 | 0.940531 | 5,250 | 4,938 | (329) | |||
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| ABC Company acquired a Canadian Subsidiary whose only asset was land. |
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| ABC Company purchased the subsidiary on 12/31/10 for CA $5,250 and retaines 100% interest in the subsidiary. |
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| Go to www.x-rates.com and use the historic lookup feature to determine the exact exchange rates on 12/31/10, 12/31/11, 12/31/12 and 12/31/13. | |||||||
| Clarification for Comprehensive Income | |
| For the Year Ended December 31, 2013 | |
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| Net Earnings | 5,385.00 |
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| Other Comprehensive (Loss) Income: |
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| Foreign Currency Translation Adjustments | (329.00) |
| Cash Flow Hedges, net of tax | (12.00) |
| Other Comprehensive Income | (10.00) |
| Total Other Comprehensive (Loss) Income | (351.00) |
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| COMPREHENSIVE INCOME | 5,034.00 |
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Clarification for statement of OE
| ABC Company | |
| Statement of Owners Equity | |
| For the Year Ended December 31, 2013 | |
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| Capital Stock: |
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| Preferred Stock | - |
| Common Stock | 88.00 |
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| 88.00 |
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| Additional Paid in Capital | 8,402.00 |
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| Retained Earnings | 23,048.00 |
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| 31,538.00 |
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| Accumulated Other |
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| Comprehensive Income | 46.00 |
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| Treasury Stock | (19,194.00) |
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| Total Shareholder's Equity | 12,390.00 |
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Clarification for Statement of Earnings
| ABC Company | |
| Statement of Retained Earnings | |
| For the Year Ended December 31, 2013 | |
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| January 1, as Reported | 20,038.00 |
| Correction of depreciation error | (903.00) |
| Cumulative increase in income |
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| from inventory method change | 771.00 |
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| January 1, as adjusted | 19,906.00 |
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| Net Income | 5,385.00 |
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| 25,291.00 |
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| Dividends | (2,243.00) |
| Balance, December 31 | 23,048.00 |
