Ganado Europe (A). Using facts in the chapter for Ganado Europe, assume the exchange rate on January 2, 2016, in Exhibit 11.5 dropped in value from $1.1400/€ to $0.8700/€. Recalculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the current rate method as shown in the popup window, . What is the amount of translation gain or loss? a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss. (Round to the nearest dollar.) Where should it appear in the financial statements? The translation gain (loss) for the year is added to the balance in the Cumulative Translation Adjustment (CTA) account.
Ganado Europe (A). Using facts in the chapter for Ganado Europe, assume the exchange rate on January 2, 2016, in Exhibit 11.5 dropped in value from $1.1400/€ to $0.8700/€. Recalculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the current rate method as shown in the popup window, . What is the amount of translation gain or loss? a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss. (Round to the nearest dollar.) Where should it appear in the financial statements? The translation gain (loss) for the year is added to the balance in the Cumulative Translation Adjustment (CTA) account.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:Data table
EXHIBIT 11.5 Ganado Europe's Translation Loss After Depreciation of the Euro: Current Rate Method
December 31, 2015
Exchange Rate
Translated
Exchange Rate
(US$/euro) Accounts (US$) (US$/euro)
1.1400
$1,140,000
0.8700
1.1400
3,762,000
0.8700
1.1400
2,280,000
0.8700
1.1400
5,244,000
0.8700
$12,426,000
BB
1.1400
$570,000
0.8700
1.1400
1,482,000
0.8700
1.1400
1,482,000
0.8700
1.1950
2,868,000
1.1950
1.1400 (a)
6,156,000
1.1400 (b)
(132,000)
$12,426,000
Assets
Cash
Accounts receivable
Inventory
Net plant and equipment
Total
Liabilities and Net Worth
Accounts payable
Short-term bank debt
Long-term debt
Common stock
Retained earnings
Translation adjustment (CTA)
Total
In Euros (€)
1,000,000
3,300,000
2,000,000
4,600,000
10,900,000
500,000
1,300,000
1,300,000
2,400,000
5,400,000
January 2, 2016
Translated
Accounts (US$)
$870,000
2,871,000
1,740,000
4,002,000
$9,483,000
$435,000
1,131,000
1,131,000
2,868,000
6,156,000
(2,238,000)
$9,483,000
10,900,000
(a) Dollar retained earnings before depreciation are the cumulative sum of additions to retained earnings of all prior years,
translated to exchange rates in each year.
(b) Translated into dollars at the same rate as before depreciation of the euro.
Transcribed Image Text:Ganado Europe (A). Using facts in the chapter for Ganado Europe, assume the exchange rate on January 2, 2016, in Exhibit 11.5 dropped in value from $1.1400/€ to $0.8700/€. Recalculate
Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the current rate method as shown in the popup window,.
What is the amount of translation gain or loss?
a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss.
$ (Round to the nearest dollar.)
Where should it appear in the financial statements?
The translation gain (loss) for the year is added to the balance in the Cumulative Translation Adjustment (CTA) account.
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 3 steps with 1 images
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