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Question: on january 1 20x1 par company purchased all the outstanding...

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On January 1, 20X1, Par Company purchased all the outstanding stock of South Bay Company, located in Canada, for $129,600. On January 1, 20X1, the direct exchange rate for the Canadian dollar (C$) was C$1 = $0.81. South Bays book value on January 1, 20X1, was C$83,000. The fair value of South Bays plant and equipment was C$9,500 more than book value, and the plant and equipment are being depreciated over 10 years with no salvage value. The remainder of the differential is attributable to a trademark, which will be amortized over 10 years. During 20X1, South Bay earned C$25,000 in income and declared and paid C$7,300 in dividends. The dividends were declared and paid in Canadian dollars when the exchange rate was C$1- $0.75. On December 31, 20X1, Par continues to hold the Canadian currency received from the dividend. On December 31, 20X1, the direct exchange rate is C$1 = $0.64. The average exchange rate during 20X1 was C$1 $0.76. Management has determined that the Canadian dollar is South Bays appropriate functional currency Required: a. Prepare a schedule showing the differential allocation and amortization for 20X1. The schedule should present both Canadian dollars and U.S. dollars. (Amounts to be deducted should be entered with a minus sign. Round Exchange Rate answers to 2 decimal places and rest of answers to nearest whole dollar.) Canadian Dollars Exchange Rate U.S. Dollars Investment cost Book value of investment on January 1, 20X1 Differential

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