The accountant for Cornell Global Domination Company didn't know whether she should use the current or temporal method to convert Subsidiary to US Dollars. Therefore, she decided to do both and select the method which showed the most income. She started the process by completing both a temporal method conversion worksheet and a current method conversion worksheet, the results of which are shown below. She even started putting amounts in the financial statements on the next page, but grew bored and quit. Amazingly enough, the amounts that she has completed so far are correct. All you need to do is finish up the financial statements, which is a piece of cake for someone as highly skilled as you. December
31,20×1
Temporal Current Combined Statement of Income and Comprehensive Income Cornell Company started business on January
1,20X1
, by issuing stock to the market, taking out a loan, and opening its doors. On December 1, 20X1, a month before the end of the year, a German company bought a large amount of the Company's products. The transaction was denominated in Euros, and the president of Cornell Company immediately entered into a hedge to protect the receivable from the effects of foreign currency exchange rate fluctuations. The company decided it was a cash flow hedge, and asked you to produce the entries. Purchase price in Euros Interest rate for Cornell
€1,000,000
6.00%
Paument Dun Parent bought some shares of Subsidiary on December
31,20×0
, as indicated below. \begin{tabular}{|l|r|} \hline Number of shares acquired & 7,500 \\ \hline Fair value per share & \\ \hline December
31,20×0
&
$30
\\ \hline December
31,20×1
&
$.50
\\ \hline Useful life of equipment &
9.20
\\ \hline Note payable & 10 \\ \hline Term & 6 \\ \hline Interest rate &
4.50%
\\ \hline Tax rate &
30.00%
\\ \hline \end{tabular} \begin{tabular}{|l|r|} \hline Subsidiary's dividends declared during 20X1 & 7,100 \\ \hline \end{tabular} Parent's partially completed income statement for the year ended December 31, 20X1, follows Determine the following balances for Parent Company as of December 31, 20X1 Equity Trading Available for Sale Deferred tax payable (asset) Page 4 Parent acquired shares of Subsidiary as indicated below. Subsidiary's revenue, expense, and dividend amo Subsidiary Company Shown below are Parent and Subsidiary separate compa Determine the followinq balances Parent acquired Subsidiary on December 31, 20X0. Subsidiary's balance sheet at that date, along with associated fair values, is shown below. Subsidiary used pushdown accounting. I ne note is que in equal annual payments or principal and interest Subsidiary acquired no equipment in 20X1. Determine the following balances for
20X1
Subsidiary issued a bond payable sometime in the past. The companies engaged in some intercompany transactions during the year. Upstream intercompany equipment sale The sale took place on January
1,20×2
Complete the dividend income, interest income, gain on sale of equipment, interest expense in the separate company financial statements. Then, complete the consolidated financial statements of the year ended December
31,20×2
. Parent acquired some of Subsidiary on December
31,20×0
. Information relating to that Parent Subsidiary Total
