Instructions:1. Calculate the re-measurement gain (loss) or translation adjustments.2. Translate the branch's income statement and retained earnings statement only.Answer A Lebanese Company has a branch in Egypt. The branch's financial statements in 31/12/2020(Egyptian pound-LE) were as follows:Income statementRevenuesCost of goods soldOther expenses (includingdepreciation 30,000)Net income.CashInventory (cost)Plant AssetsStatement of Financial PositionAPLong-term loanCapitalRetained earnings300,000(150.000)(50,000)100,000150.00050,000300,000500,000Additional information:1. The Branch acquired the plant assets in January 1, 2009 when the company wasestablished.2. On January 1, 2010, the company increased capital by LE 50,000 and purchased plantassets of LE 100,000. Plant assets have no salvage value and have the same useful life andthe company uses the straight-line depreciation.3. The branch declared and paid dividends of LE 75,000 at December 1, 2020.30,000170,000100,000200,000500,0004. Beginning inventory of January 1, 2020 was acquired during October-December 2019.5. The ending inventory was acquired on December 1, 2020.6. Cost of goods sold balance at December 31, 2020 of the branch in Lebanese lira was LL207,000,DateJanuary 1, 2009January 1, 2010October-December 2019January 1, 20197. The January 1, 2020 retained earnings balance of the branch in Lebanese lira was LL350,000.Rate1.321.361.341.308. The functional currency is the Lebanese lira (LL).9. The exchange rate for Egyptian pound against the Lebanese are:DateAverage for 2020December 1, 2020December 31, 2020Rate1.501.621.65

Exchange of Foreign Currency. When the companies operate companies in different Countries, So the…

Answered: Instructions: 1. Calculate the…

Instructions: 1. Calculate the re-measurement gain (loss) or translation adjustments. 2. Translate the branch's income statement and retained earnings statement only. Answer

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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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

Instructions:
1. Calculate the re-measurement gain (loss) or translation adjustments.
2. Translate the branch's income statement and retained earnings statement only.
Answer

A Lebanese Company has a branch in Egypt. The branch's financial statements in 31/12/2020
(Egyptian pound-LE) were as follows:
Income statement
Revenues
Cost of goods sold
Other expenses (including
depreciation 30,000)
Net income.
Cash
Inventory (cost)
Plant Assets
Statement of Financial Position
AP
Long-term loan
Capital
Retained earnings
300,000
(150.000)
(50,000)
100,000
150.000
50,000
300,000
500,000
Additional information:
1. The Branch acquired the plant assets in January 1, 2009 when the company was
established.
2. On January 1, 2010, the company increased capital by LE 50,000 and purchased plant
assets of LE 100,000. Plant assets have no salvage value and have the same useful life and
the company uses the straight-line depreciation.
3. The branch declared and paid dividends of LE 75,000 at December 1, 2020.
30,000
170,000
100,000
200,000
500,000
4. Beginning inventory of January 1, 2020 was acquired during October-December 2019.
5. The ending inventory was acquired on December 1, 2020.
6. Cost of goods sold balance at December 31, 2020 of the branch in Lebanese lira was LL
207,000,
Date
January 1, 2009
January 1, 2010
October-December 2019
January 1, 2019
7. The January 1, 2020 retained earnings balance of the branch in Lebanese lira was LL
350,000.
Rate
1.32
1.36
1.34
1.30
8. The functional currency is the Lebanese lira (LL).
9. The exchange rate for Egyptian pound against the Lebanese are:
Date
Average for 2020
December 1, 2020
December 31, 2020
Rate
1.50
1.62
1.65

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