Chapter 12 – Multinational Accounting: Issues in Financial Reporting and Translation of Foreign Entity Statements
P12-17 (continued)
c.
Taft’s consolidated comprehensive income for 20X5:
1.
Income from Taft’s operations for 20X5, exclusive
of income from the Norwegian subsidiary
$ 275,000
2.
Add: Income from the Norwegian subsidiary for 20X5
26,000
3.
Deduct: Amortization of differential for 20X5
(3,600)
Taft’s Net Income
$ 297,400
4.
Add: Translation Adjustment ($21,500 + $4,020)
25,520
Taft’s Consolidated Comprehensive Income
$ 322,920
d.
Taft’s consolidated stockholders’ equity at December 31, 20X5:
1.
Taft’s stockholders’ equity at Jan. 1, 20X5
$3,500,000
2.
Add: Net income for 20X5
297,400
3.
Deduct: Dividends declared by Taft during 20X5
(100,000)
4.
Add: Accumulated other comprehensive income:
Foreign currency translation adjustment
25,520
Consolidated Stockholders’ Equity at Dec. 31, 20X5
$3,722,920
