48-Orange Incorporation is a US-based MNC that conducts a part of its business in Oman. The transactions are denominated in Omani rials. The following details are extracted from the book of Orange incorporation in Oman. Sales RO 150,000, Cost of goods sold RO 45,000, Operating expenses RO 24,000, Depreciation expenses RO 10,000. The historical exchange rate = OMR 2/USD, The average exchange rate = OMR 3/USD, The spot exchange rate = OMR 1.5/USD. Translate the above details into reporting currency by using the monetary and non-monetary method and find the translated net profit/loss from the following options. O a. Converted net profit is USD 14,500 O b. Converted net loss is USD 12,500 O c. None of the options O d. Converted net loss is USD 14,500

48-Orange Incorporation is a US-based MNC that conducts a part of its business in Oman. The transactions are denominated in Omani rials. The following details are extracted from the book of Orange incorporation in Oman. Sales RO 150,000, Cost of goods sold RO 45,000, Operating expenses RO 24,000, Depreciation expenses RO 10,000. The historical exchange rate = OMR 2/USD, The average exchange rate = OMR 3/USD, The spot exchange rate = OMR 1.5/USD. Translate the above details into reporting currency by using the monetary and non-monetary method and find the translated net profit/loss from the following options. O a. Converted net profit is USD 14,500 O b. Converted net loss is USD 12,500 O c. None of the options O d. Converted net loss is USD 14,500

Financial Reporting, Financial Statement Analysis and Valuation

8th Edition

ISBN:9781285190907

Author:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Publisher:James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

Chapter8: Investing Activities

Section: Chapter Questions

Problem 13QE

See similar textbooks

Similar questions

6-Orange Incorporation is a US-based MNC that conducts a part of its business in Oman. The transactions are denominated in Omani Rials. The following details are extracted from the books of Orange incorporation in Oman Sales RO 150,000, Cost of goods sold RO 45,000, Operating expenses RO 24,000, Depreciation expenses RO 10,000. The historical exchange rate OMR 2/USD, The average exchange rate = OMR 3/USD, The spot exchange rate OMR 1.5/USD. Translate the above details into reporting currency by using the current and non-current method and find the translated net profit/loss from the following options. a. Converted net profit is USD 22,000 b. Converted net loss is USD 22,000 c. Converted net loss is USD 32,000 d. None of the options
38-Apple Incorporation is a US-based MNC that conducts a part of its business in Oman. The transactions are denominated in Omani Rial. The following details are extracted from the books of Apple incorporation in Oman Sales RO 150,000, Cost of goods sold RO 45,000. The spot exchange rate = OMR 2/USD, The average exchange rate = OMR 3/USD. Translate the above details into reporting currency by using the current rate method and find the translated gross profit/loss from the following options. O a. None of the options O b. Converted gross loss is USD 35,000 O c. Converted gross profit is USD 35,000 O d. Converted gross profit is USD 105,000
Example 1: Kennedy Inc. is a US based MNC that conduct a part of its business in Oman. Its Omani sales are denominated in Omani Riyal. Its income statement from Oman business at the year-end is shown below: Income Statement Particulars Amount in OMR Sales 25000 Less: Cost of goods sold 8000 Gross Profit 17000 Operating expenses 11000 EBIT 6000 Interest Expenses 2000 EBT 4000 Exchange Rates: (a) The spot exchange rate = OMR 0.3850/USD (b) The average exchange rate = OMR 0.3780/USD (c) The historical exchange rate = OMR 0.3820/USD Requirement: Translate income statement into reporting currency by using the current rate method and temporal method.
How much is the foreign exchange gain (loss) to be recognized by Entity A on January 6, 20x2? (5,000) (3,000) 5,000 3,000
1. On November 1, 2020, an entity acquired on account goods from a foreign supplier at a cost of $3,000. The accounts payable are paid on January 30, 2021. On December 1, 2020, an entity sold on account goods to a foreign customer at a selling price of $2,500. The accounts receivable is collected on February 28, 2021. The entity is operating in Philippine economy wherein the functional currency is the Philippine Peso. The following exchange rates are provided Buying spot rate Selling spot rate November 1, 2020 P40 P42 December 1, 2020 39 40 December 31, 45 45.5 2020 January 30, 2021 45.5 46 February 28, 2021 46 46.5 What is the carrying amount of monetary asset on December 31, 2020?
1. On May 1, Harris purchased parts from a Japanese company for a U.S. dollar-equivalent value of $8,400 to be paid on June 20. The exchange rates were May 1 June 20 2. On July 1, Harris sold products to a Brazilian customer for a U.S. dollar equivalent of $10,000, to be received on August 10. Brazil's local currency unit is the real. The exchange rates were July 1 August 10 Required: a. Assume that the two transactions are denominated in U.S. dollars. Prepare the entries required for the dates of the transactions and their settlement in U.S. dollars. b. Assume that the two transactions are denominated in the applicable LCUs of the foreign entities. Prepare the entries required for the dates of the transactions and their settlement in the LCUs of the Japanese company (yen) and the Brazilian customer (real). Answer is not complete. Complete this question by entering your answers in the tabs below. No Required A Required B Assume that the two transactions are denominated in the…
On March 1, Laton Products (a U.S. firm) purchased manu-facturing inputs from a Mexican supplier for 20,000 pesos, payable on June 1. The exchange rate for pesos on March 1was $0.17. If the exchange rate increases to $0.19 on June 1,what amount of gain or loss would be reported by Latonrelated to the currency exchange?a. $400 gain.b. $200 loss.c. $400 loss.d. $200 gain.
XYZ is a German Company that has its foreign affiliation in Oman as Watiyyah Inc. The functional currency of Oman is OMR. The reporting currency for XYZ is EUR. The company shows the below accounts: Cash (OMR 15000), Capital (OMR 75000), Accounts Receivable (OMR 30000), Long Term Debt (OMR 10000), Accounts payable (OMR 25000), Land and Building (OMR 25000), Inventory (OMR 40000), Prepare the balance sheet of Watiyyah Inc. Translate the above balance sheet into EUR using the temporal method using the below exchange rates: The current exchange rate is OMR 0.4350/EUR The historical exchange rate is OMR 0.4060/EUR
Tristan Narvaja, S.A. (C). Tristan Narvaja, S.A., is the Uruguayan subsidiary of a U.S. manufacturing company. Its balance sheet for January 1 is shown in the popup window, The January 1 exchange rate between the U.S. dollar and the peso Uruguayo ($U) is $U20/$. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1, using the current rate method. a. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1st, using the current rate method. b. Calculate Tristan Narvaja's contribution to its parent's translation gain or loss if the exchange rate on December 31st is $U13/$. Assume all peso Uruguayo accounts remain as they were at the beginning of the year. a. Using the current rate method, what is Tristan Narvaja's contribution to the translation exposure of its parent on January 1st? $U (Round to the nearest peso Uruguayo.) Data table (Click on the following icon in order to copy its contents into a…
Kk.91.
Tristan Narvaja, S.A. (A). Tristan Narvaja, S.A., is the Uruguayan subsidiary of a U.S. manufacturing company. Its balance sheet for January 1 is shown in the popup window, E. The January 1 exchange rate between the U.S. dollar and the peso Uruguayo ($U) is $U24/$. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1, using the current rate method. a. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1st, using the current rate method. b. Calculate Tristan Narvaja's contribution to its parent's translation loss if the exchange rate on December 31st is $U24/$. Assume all peso Uruguayo accounts remain as they were at the beginning of the year. a. Using the current rate method, what is Tristan Narvaja's contribution to the translation exposure of its parent on January 1st? $U (Round to the nearest peso Uruguayo.)
A7