Water Bottling Inc - Required:
Assume That WBC's Functional Currency Is the Euro

Essay

Water Bottling Inc. (WBI)is a 100% wholly owned subsidiary with operations in France. WBI was purchased by a Canadian parent on January 1, 20X5, and the FVA was €375,000, all allocated to goodwill. The financial records of WBI are maintained in euros and provide the following information with respect to equipment and goodwill.
Equipment: Purchased on January 1, 20X5, for €250,000, and depreciated over five years on a straight-line basis.
Equipment: Purchased on January 1, 20X6, for €175,000, and depreciated over five years on a straight-line basis.
Goodwill had a balance of €375,000.
Foreign exchange rates were as follows:
$\begin{array}{ll}\text { Jantuary } 1,20 X5 & € 1=1.50 \\\text { Average for } 20X5 & € 1=1.48 \\\text { January } 1,20X6 & € 1=1.46\\\text { Average for } 20X6 & € 1=1.45 \\\text { January } 1,20X7 & € 1=1.51 \\\text { Average for } 20X 7 & € 1=1.58 \\\text { December } 31,20X7 & € 1=1.62\end{array}$
- Required:
Assume that WBC's functional currency is the euro. Calculate the translated Canadian dollar balances for the following accounts for December 31, 20X7.
a. Equipment
b. Accumulated depreciation-equipment
c. Depreciation expense
d. Goodwill