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.
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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
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.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education