90.2K

Verified Solution

Link Copied!

Please Help

1 .For internal decision-making purposes, Crane Corporations operating segments have been identified as follows:

Operating segment Revenue ($) Profit (Loss) ($) Identifiable assets

Food products 323,000 198,000 411,000

Plastic & packaging 113,000 59,000 375,000

Consumer & commercial 45,000 (25,000) 100,000

Health & scientific 86,000 22,000 310,000

Chemicals 33,000 (9,000) 80,000

Total 600,000 245,000 1,276,000

Required:

1. In applying the Profit (loss) test to identify reporting segments, what is the test value for Crane Corporation?
2. Using the "profit (loss)" test, which of Crane's operating segments will also be reporting segments?

2. Cesar and Damon share partnership profits and losses at 60% and 40%, respectively. The partners agree to admit Egan into the partnership for a 50% interest in capital and earnings. Capital accounts immediately before the admission of Egan are:

Cesar (60%) $ 600,000

Damon (40%) 600,000

Total $1,200,000

Required:

1. Prepare the journal entry(s) for the admission of Egan to the partnership assuming Egan invested $800,000 for the ownership interest. Egan paid the money directly to Cesar and to Damon for 50% of each of their respective capital interests. The partnership records goodwill.
2. Prepare the journal entry(s) for the admission of Egan to the partnership assuming Egan invested $1,000,000 for the ownership interest. Egan paid the money to the partnership for a 50% interest in capital and earnings. The partnership records goodwill.
3. Prepare the journal entry(s) for the admission of Egan to the partnership assuming Egan invested $1,400,000 for the ownership interest. Egan paid the money to the partnership for a 50% interest in capital and earnings. The partnership records goodwill.

3. PAA, US corporation acquired all outstanding capital stock of SAA Germany on 1 January 2020 for $63,000, when the exchange rate for Euro was EUR1.2 and SAA equity consisted of EUR40,000 capital stock and EUR10,000 retained earnings. SAA functional currency is the Euro.

Exchange rate for 2020 are as follows:

January 01, 2020 = 1EUR = $1.20

Dividends rate 1EUR = $1.36

December 31, 2020 = 1 = $1.40

2020 average rate = 1EUR = $1.3

SAA adjusted trial balance is presented below for the year ended December 31, 2020. (in EUR)

Debits:

Cash 13,750

Accounts receivables 10,500

Inventory 5,000

Equipment 50,000

COGS 22,500

Operating expenses 15,000

Dividends 6,250

Total debits EUR123,000

Credits:

Accumulated depreciation 7,500

Accounts payable 3,000

Bonds payable 12,500

Common stock 40,000

Retained earning 10,000

Sales revenue 50,000

Total credits EUR123,000

Required: Prepare SAA:

Translation working papers;

Answer & Explanation Solved by verified expert

See Answer