prepare a worksheet to remeasure the adjusted trial balance of stu corporation into 571985

Remeasurement worksheet

Phi, a U.S. firm, acquired 100 percent of Stu’s outstanding stock at book value on January 1, 2011, for $112,000. Stu is a New Zealand company, and its functional currency is the U.S. dollar. The exchange rate for New Zealand dollars (NZ$) was $0.70 when Phi acquired its interest. Stu’s stockholders’ equity on January 1, 2011, consisted of NZ$150,000 capital stock and NZ$10,000 retained earnings. The adjusted trial balance for Stu at December 31, 2011, is as follows:

ADDITIONAL INFORMATION

1. Prepaid expenses (supplies) of NZ$18,000 were on hand when Phi acquired Stu. Other operating expenses include NZ$8,000 of these supplies that were used in 2011. The remaining NZ$10,000 of supplies is on hand at year end.

2. The NZ$120,000 cost of sales consists of NZ$50,000 inventory on hand at January 1, 2011, and NZ$100,000 in purchases during the year, less NZ$30,000 ending inventory that was acquired when the exchange rate was $0.66.

3. The NZ$60,000 of equipment consists of NZ$50,000 included in the business combination and NZ$10,000 purchased during 2011, when the exchange rate was $0.68. A depreciation rate of 20 percent is applicable to all equipment for 2011.

4. Exchange rates for 2011 are summarized as follows:

REQUIRED: Prepare a worksheet to remeasure the adjusted trial balance of Stu Corporation into U.S. dollars at December 31, 2011.