Crimson Lights Inc

Crimson Lights Inc. (CL)is a 100% wholly owned subsidiary with operations in France. CL was purchased by a Canadian parent on January 1, 2012. The financial records of CL are maintained in euros and provide the following information with respect to equipment, and goodwill.
Equipment - purchased on January 1, 2012 for €250,000 - depreciated over 5 years on a straight-line basis.
Equipment - purchased on January 1, 2013 for €175,000 - depreciated over 5 years on a straight-line basis.
Goodwill - € 375,000
Foreign exchange rates were as follows:
January 1, 2012 €1 = 1.50
Average for 2012 €1 = 1.48
January 1, 2013 €1 = 1.46
Average for 2013 €1 = 1.45
January 1, 2014 €1 = 1.51
Average for 2014 €1 = 1.58
December 31, 2014 €1 = 1.62
Required:
Assume that CL's functional currency is the euro. Calculate the translated Canadian dollar balances for the following accounts at December 31, 2014.
a. Equipment
b. Accumulated depreciation - equipment
c. Depreciation expense
d. Goodwill

Correct Answer:

Verified

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