Foreign Corporation operates independently in the United States but is owned by a Philippine corporation. It reported the following in its USD-denominated financial statements submitted to its local regulators: Year 2 Bonds Payable $ 8,000.00 Ordinary Share Capital 10,000.00 Retained Earnings 2,240.00 Total Liabilities and Equity $20,240.00 Ordinary shares were issued when the exchange rate was P51.23. Retained Earnings balance as of the end of Year 1 had a translated value P111,000. During Year 2, dividends amounting to $500 were declared and paid when the exchange rate is P52.41.
Foreign Corporation operates independently in the United States but is owned by a Philippine corporation. It reported the following in its USD-denominated financial statements submitted to its local regulators: Year 2 Bonds Payable $ 8,000.00 Ordinary Share Capital 10,000.00 Retained Earnings 2,240.00 Total Liabilities and Equity $20,240.00 Ordinary shares were issued when the exchange rate was P51.23. Retained Earnings balance as of the end of Year 1 had a translated value P111,000. During Year 2, dividends amounting to $500 were declared and paid when the exchange rate is P52.41.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Foreign Corporation operates independently in the United States but is owned by a Philippine corporation. It reported the following in its USD-denominated financial statements submitted to its local regulators:
| Year 2 | |
| Bonds Payable | $ 8,000.00 |
| Ordinary Share Capital | 10,000.00 |
| 2,240.00 | |
| Total Liabilities and Equity | $20,240.00 |
Ordinary shares were issued when the exchange rate was P51.23.
Retained Earnings balance as of the end of Year 1 had a translated value P111,000. During Year 2, dividends amounting to $500 were declared and paid when the exchange rate is P52.41.
The average exchange rate and closing spot rate for Year 2 is P52.36 and P52.47 respectively.
Cumulative Translation Gain would be P6,629 as of the end of Year 2.
Based on the above, what is the net income in Philippine peso for the year?
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