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##### I just want to have the asks checked. Lee Corpora...

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I just want to have the asks checked. Lee Corporation is an American company that began operations on January 1, 2004. It has just completed its fourth full year of operations on December 31, 2007. Ending Year Balances for the prior year that ended on December 2006 were as follows: Retained Earnings \$225,000 Common Stock at par \$500,000 Additional Paid-in Capital \$1,000,000 Treasury Stock \$200,000 Income before taxes for 2007 totaled \$240,000 Effective Tax Rate was 40% for all years of operation including 2007 The following information relates to 2007: 1. An error was discovered during 2007. Specifically, depreciation expense was understated in 2005 resulting in the need for a Prior Period Adjustment of \$25,000 before taxes. 2. Lee Corporation changed its method of valuing inventory during 2007. The cumulative decrease in income from the change in inventory methods was \$35,000 before taxes. 3. Lee Corporation declared cash dividends of \$100,000 on 10/31/07. Half of the dividends (\$50,000) were paid on 12/31/07. Lee acquired a Canadian subsidiary whose sole asset is a piece of land. Lee acquired the subsidiary on 12/31/04 for the exact value of the land, CAD 100,000. Lee owns 100% of the subsidiary. Deliverables: In the attached Excel worksheet complete the following: Section 1 ? FOREIGN CURRENCY TRANSLATION: a) Complete the Foreign Currency Translation table ? Go to www.x-rates.com and use the historic lookup feature to determine exchange rates on 12/31/04, 12/31/05, 12/31/06 and 12/31/07 ? Enter the exchange rate factors in the ?Exchange Rate? column of the Foreign Currency Translation table ? Apply the factors using the appropriate formula to convert investment from CAD to USD ? Calculate the annual changes in the USD Value of the investment ? Calculate the cumulative change in value (from purchase to balance sheet date) b) Prepare the journal entry for the purchase in 2004, and the change in carrying value each subsequent year Section 2 ? STATEMENT OF CHANGES IN OWNERS? EQUITY a) Prepare the entries to: ? Correct the understatement of depreciation expense ? Record the cumulative effect of change in inventory methods ? Record the dividends declared ? Record the dividends paid b) Complete the statement of changes in owners? equity

Paper#7549 | Written in 18-Jul-2015

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