**Ganado Europe (B):** Using facts from the chapter for Ganado Europe, assume that the exchange rate on January 2, 2016, in Exhibit 11.6 dropped in value from $1.2000/€ to $0.9000/€. Recalculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the temporal rate method as shown in the popup window.1. **a.** What is the amount of translation gain or loss?2. **b.** Where should it appear in the financial statements?3. **c.** Why does the translation loss or gain under the temporal method differ from the loss or gain under the current rate method?---### a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss. $ [Input box]**(Round to the nearest dollar.)**---There is a blue link labeled **(Round to the nearest dollar.)** above the input box for providing the calculated amount. **Exhibit 11.6**: Ganado Europe's Translation Loss After Depreciation of the Euro: Temporal Method### December 31, 2015- **Assets** - **Cash**: €1,600,000 | Exchange Rate: 1.2000 | Translated: $1,920,000 - **Accounts Receivable**: €3,200,000 | Exchange Rate: 1.2000 | Translated: $3,840,000 - **Inventory**: €2,400,000 | Exchange Rate: 1.2180 | Translated: $2,923,200 - **Net Plant and Equipment**: €4,800,000 | Exchange Rate: 1.2760 | Translated: $6,124,800 - **Total Assets**: €12,000,000 | Translated: $14,808,000- **Liabilities and Net Worth** - **Accounts Payable**: €800,000 | Exchange Rate: 1.2000 | Translated: $960,000 - **Short-term Bank Debt**: €1,600,000 | Exchange Rate: 1.2000 | Translated: $1,920,000 - **Long-term Debt**: €1,600,000 | Exchange Rate: 1.2000 | Translated: $1,920,000 - **Common Stock**: €1,800,000 | Exchange Rate: 1.2760 | Translated: $2,296,800 - **Retained Earnings**: €6,200,000 | Exchange Rate: 1.2437 | Translated: $7,711,200 - **Translation Gain (Loss)**: — - **Total Liabilities and Net Worth**: €12,000,000 | Translated: $14,808,000### January 2, 2016- **Assets** - **Cash**: €1,600,000 | Exchange Rate: 0.9000 | Translated: $1,440,000 - **Accounts Receivable**: €3,200,000 | Exchange Rate: 0.9000 | Translated: $2,880,000 - **Inventory**: €2,400,000 |

Translation gain or loss arises from the change in the exchange value of the currency. Exchange…

Answered: Ganado Europe (B). Using facts in the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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From the following graph explain how the Dollar-Euro Exchange Rate movementduring the period Nov 23, 2016 - Nov 25, 2021? And identify any risks faced byinvestors investing in stock market?
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2.Jameson Ltd purchased goods on credit from a European supplier costing Euros 80,000 on 29th May 2020 when the exchange rate was A$1 = O.78 Euros. At 30th June 2020, its balance date . the exchange rate was A$1 = 0.79 Euros . Jameson Ltd paid the European supplier on 5th July 2020 when the exchange rate was A$1= 0.76 Euros Required: Prepare the journal entries for the above
Q1-10 If a PPP estimate of the dollar/pound exchange rate is $1.61/£ and the current spot rate is observed to be $1.68/£, on the basis of these two rates you should, viewing the long-run, a. expect the dollar to appreciate against the pound. b. take a "short" position in dollars. c. expect the pound to appreciate against the dollar. d. have no expectation regarding the likely movement of the dollar/pound exchange rate.
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.
None
Cassowary Corporation’s balance sheet at December 31, 2016 included a $20,400 account receivable from Quail Corporation of Australia. The account receivable is denominated as 30,000 Australian dollars (A$). Assuming no entries have been made since 12/31/2016, what single entry should Cassowary make on January 16, 2017 when the account receivable is collected and the exchange rate for A$ is $.67? Select one: a. Cash (fc) 20,100 Accounts Receivable (fc) 20,100 b. Cash (fc) 20,100 Exchange Loss 300 Accounts Receivable (fc) 20,400 c. Cash (fc) 20,400 Accounts Receivable (fc) 20,400 d. Cash (fc) 20,700 Accounts Receivable (fc) 20,400 Exchange Gain 300
Suppose that you are the Chief Financial Officer of a corporation based in Germany (EUR is thehome currency), having operations globally in all the continents.In the performance of your estimations and calculations you have to analyze the exposures in theforeign currencies. In the appendix there is a table with downloaded information from theEuropean Central Bank (ECB)’s website, the exchange rates of each day of September 2020.Required:i. Present that information in a table for 5 currencies (freely decide whichcurrencies).ii. Discuss the fluctuations and how the exchange rates have changed from the firstto the last day of the period under investigation.iii. Discuss how the following activities of your company are expected to beinfluenced by the expected EUR appreciation for the last quarter of 2020.Explain your answers.i. Domestic sales;ii. Foreign sales denominated in domestic currency;iii. Foreign sales denominated in foreign currency;iv. Importing goods for domestic sales…
Option c is not correct
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Ganado Europe (C). Using facts in the chapter for Ganado Europe, assume the exchange rate on January 2, 2016, in Exhibit 11.5 appreciated from $1.2900/€ to $1.5800/€. Calculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the current rate method as shown in the popup window, a. What is the amount of translation gain or loss? b. Where should it appear in the financial statements? Data table a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss. (Round to the nearest dollar.) (Click on the following icon in order to copy its contents into a spreadsheet.) EXHIBIT 11.5 Ganado Europe's Translation Loss After Depreciation of the Euro: Current Rate Method Assets Cash In Euros (€) (US$/euro) December 31, 2015 Exchange Rate Translated Accounts (US$) January 2, 2016 Exchange Rate (US$/euro) Translated Accounts (US$) 1,500,000 1.2900 $1,935,000 1.5800 $2,370,000 Accounts receivable Inventory…

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