【正文】 0,610Requirement 2 Stripe Corporation Translated Ine Statement For the Year Ended December 31, 2012Sales revenue $936,000Expenses:Salary expense (586,560)Depreciation expense (16,200)Other expenses 182,520)Ine before exchange gains or losses $150,720Exchange loss (20,610)Net ine $130,110Retained earnings, January 1, 2012 365,000Retained earnings, December 31, 2012 $495,110Requirement 3 Stripe Corporation Translated Balance Sheet December 31, 2012Cash $270,040Accounts receivable 483,560Notes receivable 153,860Buildingnet 619,650Land 162,000Total assets $1,689,110Accounts payable $314,000Common stock 880,000Retained earnings 495,110Total liabilities amp。 equities $1,689,110Objective: LO5Difficulty: Moderate7) On January 1, 2011, Pilgrim Corporation, a . firm, acquired ownership of Settlement Corporation, a foreign pany, for $168,000, when Settlement39。s stockholders39。 equity consisted of 300,000 local currency units (LCU) and retained earnings of 100,000 LCU. At the time of the acquisition, Settlement39。s assets and liabilities were fairly valued except for a patent that did not have any recorded book value. All excess purchase cost was attributed to the patent, which had an estimated economic life of 10 years at the date of acquisition. The exchange rate for LCUs on January 1, 2011 was $.40. The functional currency for Settlement is LCU. Settlement39。s books are maintained in LCU.A summary of changes in Settlement39。s stockholders39。 equity during 2011 and the exchange rates for LCUs is as follows: LCU Rates DollarsStockholders39。 equity 1/1/11 400,000 $.40H $160,000Net ine 100,000 .42A 42,000Dividends 12/1/11 (50,000) .43H (21,500)Equity adjustment 17,500Stockholders39。 equity _______ ________ 12/31/11 450,000 .44C $198,000Required: Determine the following:1. Fair value of the patent from Pilgrim39。s investment in Settlement on January 1, 2011 in . dollars.2. Patent amortization for 2011 in . dollars.3. Unamortized patent at December 31, 2011 in . dollars.4. Equity adjustment from the patent in . dollars.5. Ine from Settlement for 2011 in . dollars.6. Investment in Settlement balance at December 31, 2011 in . dollars.Answer: Requirement 1Patent Fair Value:Cost of investment $168,000Book value acquired 400,000 LCU $.40 = (160,000)Patent in dollars $8,000Patent in LCU = $8,000/$.40 per LCU = 20,000Requirement 2Patent amortization for 2011:Patent: 20,000 LCU/10 years = 2,000 LCU per year2,000 LCU per year $.42 equals amortization of: $840Requirement 3Unamortized patent:Patent (20,000 LCU 2,000 LCU) $.44 = $7,920Requirement 4Equity adjustment from patent:Beginning patent (from Req. 1) $8,000Patent amortization (from Req. 2) (840)Subtotal 7,160Ending patent (from Req. 3) 7,920Equity adjustment $760Requirement 5Ine from Settlement:Equity in ine $42,000Less: Patent amortization (840)Ine from Settlement $41,160Requirement 6Investment in Settlement balance at 12/31/11:Cost, January 1, 2011 $168,000Add: Ine for 2011 (from Req. 5) 41,160Less: Dividends (21,500)Add: Equity adjustment from patent (from Req. 4) 760Add: Equity adjustment from translation 17,500Investment balance, December 31, 2011 $205,920Check:Book value: $198,000Unamortized patent (from Req. 3) 7,920Investment balance $205,920Objective: LO7Difficulty: Moderate8) Plate Corporation, a US pany, acquired ownership of Saucer Corporation of Switzerland on January 1, 2011 for $1,500,000 when Saucer39。s stockholders39。 equity in Swiss francs (SF) consisted of 700,000 SF Capital Stock and 300,000 SF Retained Earnings. The exchange rate for Swiss francs was $ on January 1. All excess purchase cost was attributed to a Trademark that did not have a recorded book value. The trademark is to be amortized over 20 years.Saucer39。s functional currency is Swiss francs and the records are kept in the same currency. A summary of changes in Saucer39。s stockholders39。 equity during 2011 and relevant exchange rates are as follows: In Exchange In Francs Rates DollarsStockholders39。 equity 1/1/11 163。1,000,000 $ $1,200,000Net ine 250,000 287,500Dividends 11/1/11 (100,000) (110,000)Equity adjustment (170,000)Stockholders39。 equity _________ _________ 12/31/11 163。1,150,000 $1,207,500Required: Determine the following:1. Fair value of the Trademark from Plate39。s investment in Saucer on January 1, 2011 in . dollars.2. Trademark amortization for 2011 in . dollars.3. Unamortized Trademark at December 31, 2011 in . dollars.4. Equity adjustment from the Trademark in . dollars.5. Ine from Saucer for 2011 in . dollars.6. Investment in Saucer balance at December 31, 2011 in . dollars.Answer: Requirement 1Trademark:Cost of investment $1,500,000Book value acquired 1,000,000 $ (1,200,000)Fair value of Trademark in dollars $ 300,000Trademark in Swiss francs = $300,000/$ = 250,000Requirement 2Trademark amortization for 2011:Trademark: 250,000/20 yr. $ average rate = $14,375Requirement 3Unamortized Trademark:Trademark (250,000 12,500SF) $ exchange rate $249,375Requirement 4Equity adjustment from Trademark:Beginning Trademark (from Req. 1) $300,000Trademark amortization (from Req. 2) (14,375)Less: Ending Trademark (237,500 $) (249,375)Equity adjustment $ 36,250Requirement 5Ine from Saucer:Equity in ine $287,500Less: Trademark amortization (14,375)Ine from Saucer $273,125Requirement 6Investment Balance at December 31, 2011:Cost, January 1, 2011 $1,500,000Add: Ine from Saucer (from Req. 5) 273,125Less: Dividends (110,000)Less: Equity adjustment from translation (170,000)Less: Equity adjustment from Trademark (from Req. 4) (36,250)Investment balance, December 31, 2011 $1,456,875Check:Share of Saucer39。s equity $1,207,