A multinational Corporation based in the United States of America has subsidiaries in the UK, Canada, and France. As at December 31, 2020, inter-company indebtedness were as follows: Debtors Creditors Amount Currency UK Canada 1,500,000 Can$ UK France 600,000 Euro (€) France Canada 800,000 Can$ Canada UK 94,000 Sterling (£) Canada France 400,000 Euro (€) It is the policy company’s policy to net off inter-company balances to the greatest extent possible. The central treasury department is to use the following exchange rates for these purposes: US$1 =Can$1.237/€0.8620/£0.729 Required: Calculate the net payment to be made between the subsidiaries after netting off inter-company balances, by presenting the payoff in a matrix/table format.
A multinational Corporation based in the United States of America has subsidiaries in the UK, Canada, and
France. As at December 31, 2020, inter-company indebtedness were as follows:
Debtors Creditors Amount Currency
UK Canada 1,500,000 Can$
UK France 600,000 Euro (€)
France Canada 800,000 Can$
Canada UK 94,000 Sterling (£)
Canada France 400,000 Euro (€)
It is the policy company’s policy to net off inter-company balances to the greatest extent possible. The
central treasury department is to use the following exchange rates for these purposes:
US$1 =Can$1.237/€0.8620/£0.729
Required:
Calculate the net payment to be made between the subsidiaries after netting off inter-company balances,
by presenting the payoff in a matrix/table format.
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