A U.S. company's foreign subsidiary had the following amounts in stickles (5), the functional currency, in 2018: $12,000,e00 600,000 240, eee Cost of goods sold Ending inventory Beginning inventory The average exchange rate during 2018 was §1 = S.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = S.90. The exchange rate at December 31, 2018 was §1= $.84. Assuming that the foreign nation for the subsidiary had a highly inflationary economy, at what amount should that foreign subsidiary's purchases have been reflected in the 2018 U.S. dollar income statement? Multiple Cholce $11,865,600. $11,577,600. $11,520,000. $11,613,600.

A U.S. company's foreign subsidiary had the following amounts in stickles (5), the functional currency, in 2018: $12,000,e00 600,000 240, eee Cost of goods sold Ending inventory Beginning inventory The average exchange rate during 2018 was §1 = S.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = S.90. The exchange rate at December 31, 2018 was §1= $.84. Assuming that the foreign nation for the subsidiary had a highly inflationary economy, at what amount should that foreign subsidiary's purchases have been reflected in the 2018 U.S. dollar income statement? Multiple Cholce $11,865,600. $11,577,600. $11,520,000. $11,613,600.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

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?
Icebreaker Company (a U.S. -based company) purchases materials from a foreign supplier on December 1, 2023, with payment of 20,000 dinars to be made on March 1, 2024. The materials are consumed immediately and recognized as cost of goods sold at the date of purchase. On December 1, 2023, Icebreaker enters into a forward contract to purchase 20,000 dinars on March 1, 2024. Relevant exchange rates for the dinar on various dates are as follows: Required: a-1. Assuming that Icebreaker designates the forward contract as a cash flow hedge of a foreign currency payable, prepare journal entries for the import purchase and foreign currency forward contract in U.S. dollars. a-2. What is the impact on 2023 net income? a-3. What is the impact on 2024 net income? a-4. What is the impact on net income over the two accounting periods? b-1. Assuming that Icebreaker designates the forward contract as a fair value hedge of a foreign currency payable, prepare journal entries for the import purchase and…
Company X is a U.S.-based IT company with operations and earnings in a number of foreign countries. The company's profits by subsidiary, in local currency (in millions), are shown in the following table for 2019 and 2020. Net Income Japanese Subsidiary Britih Subsidiary 2019 JPY 200 GBP 100.00 2020 JPY 1,480 GBP 108.40 The average exchange rate for each year, by currency pairs, is the following. Exchange Rate USD = 1 GBP JPY = 1 USD 2019 97.57 1.5646 2020 90.88 1.6473 Use the above data, Students answer the following questions. a. What is Company X's consolidated profits in U.S. dollars in 2019 and 2020? b. If the same exchange rates are used for both years, what is the change in corporate earnings on a "constant currency" basis? c. Using the results of the constant currency analysis in part b, is it possible to separate Company X's growth in earnings between local currency earnings and foreign exchange rate impacts on a consolidated basis?
Brandt Corp. (a U.S.-based company) sold parts to a South Korean customer on December 1, 2020, with payment of 10 million South Korean won to be received on March 31, 2021. The following exchange rates apply: Date Spot Rate Forward Rate(to March 31, 2021) December 1, 2020 $ 0.0035 $ 0.0034 December 31, 2020 0.0033 0.0032 March 31, 2021 0.0038 N/A 1. Assuming that Brandt did not hedge his foreign exchange risk, how much foreign exchange gain or loss should it report on its 2020 income statement with regard to this transaction? a. 3000 gain b. 2000 loss c. 5000 gain d. 1000 loss 2. Assuming that Brandt entered into a forward contract to sell 10 million South Korean won on December 1, 2020, as a fair value hedge of a foreign currency receivable, what is the net impact on its net income in 2020 resulting from a fluctuation in the value of the won? Brandt amortizes forward points on a monthly basis using a straight-line method. Ignore…
The following are the foreign currency positions of an FI, expressed in the foreign currency: Currency Assets Liabilities FX Bought FX Sold Swiss franc (Sf) Sf 132,600 Sf 54,570 Sf 12,750 Sf 17,850 British pound (£) £ 42,500 £ 21,500 £ 15,500 £ 22,000 Japanese yen (¥) ¥ 8,200,000 ¥ 3,500,000 ¥ 1,600,000 ¥ 9,100,000 The exchange rate of dollars for Sf is 1.02, of dollars for British pound is 1.31, and of dollars for yen is .00953.The following are the foreign currency positions converted to dollars: Currency Assets Liabilities FX Bought FX Sold Swiss franc (Sf) $ 130,000 $ 53,500 $ 12,500 $ 17,500 British pound (£) $ 55,675 $ 28,165 $ 20,305 $ 28,820 Japanese yen (¥) $ 78,146 $ 33,355 $ 15,248 $ 86,723 a. What is the FI’s net exposure in Swiss francs stated in Swiss francs (Sf) and in dollars ($)?b. What is the FI’s net exposure in British pounds stated in British pounds (£) and in…
ASSUME THAT THE U.S. DOLLAR IS THE FUNCTIONAL CURRENCY. Ruthie Inc. had a debit adjustment of $7900 for the year ended December 31, 2019, from restating its foreign subsidiary's accounts from their local currency units into U.S. dollars. Additionally, Ruthie had a receivable from a foreign customer. It is denominated in the customer's local currency. On December 31, 2018, this receivable for 300,000 local currency units (LCU) was correctly included in Ruthie's balance sheet at $124200. When the receivable was collected on February 15, 2019, the U.S. dollar-equivalent was $122200. In Ruthie's 2019 consolidated statement of income, how much should be reported as foreign exchange gain/(loss) in computing net income? BE SURE TO TYPE A SIMPLE NUMBER WITH NO COMMAS OR DOLLAR SIGNS. FOR EXAMPLE, TYPE 1000 INSTEAD OF $1,000. IF THE NUMBER IS NEGATIVE, TYPE -1000 INSTEAD OF ($1,000) Your Answer:
provide correct answer need help!!
Winston Corp., a U.S. company, had the following foreign currency transactions during 2021: ( 1.) Purchased merchandise from a foreign supplier on July 16, 2021 for the U.S. dollar equivalent of $47,000 and paid the invoice on August 3, 2021 at the U.S. dollar equivalent of $54,000. (2.) On October 15, 2021 borrowed the U.S. dollar equivalent of $315,000 evidenced by a non-interest-bearing note payable in euros on October 15, 2022. The U.S. dollar equivalent of the note amount was $295,000 on December 31, 2021, and $299,000 on October 15, 2022. What amount should be included as a foreign exchange gain or loss from the two transactions for 2022?
A3
Dd5.
Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation 2011 2013 NGN 15,450 10,500 4,050 40,500 (20,250) 2020 Feb. 1 Paid 8,050,000 NGN on the note payable. May 1 Sold entire inventory for 16,500,000 NGN on account. June 1 Sold land for 6,050,000 NGN cash. Aug. 1 Collected all accounts receivable. August 1, 2019 December 31, 2019 February 1, 2020 May 1, 2020 Hay NGN 50,250 The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During 2020, the following transactions took place: Sept. 1 Signed long-term note to receive 8,050,000 NGN cash. Oct. 1 Bought inventory for 20,050,000 NGN cash. Nov. 1 Bought land for 3,050,000 NGN on account. Dec. 1 Declared and paid 3,050,000 NGN cash dividend to parent.…
ABC Corp., a US corporation, purchased goods on credit from a British company on April 8, 2007. ABC made a payment of 10,000FC on May 8, 2007. The exchange rate was $1= FC .50 on April 8 and $1= FC .60 on May 8. What amount of foreign exchange gain or loss should be recognized on May 8 ?