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Rolfe Company (a U.S.-based company) has a subsidiary In Nigeria, where the local currency unit is the naira (NGN). On December 31 2023, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation NGN 16,240 Notes payable 10,900 Common stock 4,090 Retained earnings 40,900 (20,450) NGN 51,680 NGN 20,180 21,000 10,500 NGN 51,680 The subsidiary Issued the common stock In 2015, and acquired the land and building in 2016. It acquired the Inventory on August 1, 2023. During 2024, the following transactions took place: 2824 February 1 Paid 8,090,000 NGN on the note payable. May 1 June 1 August 1 Sold entire inventory for 16,900,000 NGN on account. Sold land for 6,090,000 NGN cash. Collected all accounts receivable. September 1 Signed long-term note to receive 8,090,000 NGN cash. Bought inventory for 20,090,000 NGN cash. October 1 November 1 December 1 Bought land for 3,090,000 NGN on account. Declared and paid 3,090,000 NGN cash dividend to parent. December 31 Recorded depreciation for the entire year of 2,045,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: NGN 1 = $ 0.0057 2015 2016 August 1, 2023 NGN 1 = = 0.0051 NGN 1 = 0.0071 December 31, 2023 February 1, 2024 May 1, 2024 June 1, 2024 NGN 1 = 0.0073 NGN 1 = 0.0075 NGN 1 = 0.0077 NGN 1 = 0.0079 August 1, 2024 NGN 1 = 0.0083 September 1, 2824 NGN 1 = 0.0085 October 1, 2024 NGN 1 = 0.0087 November 1, 2024 NGN 1 = 0.0089 December 1, 2024 NGN 1 = 0.0091 NGN 1 = 0.0102 NGN 1 = 0.0092 December 31, 2024 Average for 2824 Required: a. Assuming the NGN Is the subsidiary's functional currency, what is the translation adjustment determined solely for 2024? b. Assuming the U.S. dollar is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2024? Note: Input all amounts as positive. Enter amounts In whole dollars. a. Positive b. Remeasurement gain translation adjustment < Prev

Rolfe Company (a U.S.-based company) has a subsidiary In Nigeria, where the local currency unit is the naira (NGN). On December 31 2023, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation NGN 16,240 Notes payable 10,900 Common stock 4,090 Retained earnings 40,900 (20,450) NGN 51,680 NGN 20,180 21,000 10,500 NGN 51,680 The subsidiary Issued the common stock In 2015, and acquired the land and building in 2016. It acquired the Inventory on August 1, 2023. During 2024, the following transactions took place: 2824 February 1 Paid 8,090,000 NGN on the note payable. May 1 June 1 August 1 Sold entire inventory for 16,900,000 NGN on account. Sold land for 6,090,000 NGN cash. Collected all accounts receivable. September 1 Signed long-term note to receive 8,090,000 NGN cash. Bought inventory for 20,090,000 NGN cash. October 1 November 1 December 1 Bought land for 3,090,000 NGN on account. Declared and paid 3,090,000 NGN cash dividend to parent. December 31 Recorded depreciation for the entire year of 2,045,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: NGN 1 = $ 0.0057 2015 2016 August 1, 2023 NGN 1 = = 0.0051 NGN 1 = 0.0071 December 31, 2023 February 1, 2024 May 1, 2024 June 1, 2024 NGN 1 = 0.0073 NGN 1 = 0.0075 NGN 1 = 0.0077 NGN 1 = 0.0079 August 1, 2024 NGN 1 = 0.0083 September 1, 2824 NGN 1 = 0.0085 October 1, 2024 NGN 1 = 0.0087 November 1, 2024 NGN 1 = 0.0089 December 1, 2024 NGN 1 = 0.0091 NGN 1 = 0.0102 NGN 1 = 0.0092 December 31, 2024 Average for 2824 Required: a. Assuming the NGN Is the subsidiary's functional currency, what is the translation adjustment determined solely for 2024? b. Assuming the U.S. dollar is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2024? Note: Input all amounts as positive. Enter amounts In whole dollars. a. Positive b. Remeasurement gain translation adjustment < Prev

FINANCIAL ACCOUNTING
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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Rolfe Company (a U.S.-based company) has a subsidiary In Nigeria, where the local currency unit is the naira (NGN). On December 31 2023, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation NGN 16,240 Notes payable 10,900 Common stock 4,090 Retained earnings 40,900 (20,450) NGN 51,680 NGN 20,180 21,000 10,500 NGN 51,680 The subsidiary Issued the common stock In 2015, and acquired the land and building in 2016. It acquired the Inventory on August 1, 2023. During 2024, the following transactions took place: 2824 February 1 Paid 8,090,000 NGN on the note payable. May 1 June 1 August 1 Sold entire inventory for 16,900,000 NGN on account. Sold land for 6,090,000 NGN cash. Collected all accounts receivable. September 1 Signed long-term note to receive 8,090,000 NGN cash. Bought inventory for 20,090,000 NGN cash. October 1 November 1 December 1 Bought land for 3,090,000 NGN on account. Declared and paid 3,090,000 NGN cash dividend to parent. December 31 Recorded depreciation for the entire year of 2,045,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: NGN 1 = $ 0.0057 2015 2016 August 1, 2023 NGN 1 = = 0.0051 NGN 1 = 0.0071 December 31, 2023 February 1, 2024 May 1, 2024 June 1, 2024 NGN 1 = 0.0073 NGN 1 = 0.0075 NGN 1 = 0.0077 NGN 1 = 0.0079 August 1, 2024 NGN 1 = 0.0083 September 1, 2824 NGN 1 = 0.0085 October 1, 2024 NGN 1 = 0.0087 November 1, 2024 NGN 1 = 0.0089 December 1, 2024 NGN 1 = 0.0091 NGN 1 = 0.0102 NGN 1 = 0.0092 December 31, 2024 Average for 2824 Required: a. Assuming the NGN Is the subsidiary's functional currency, what is the translation adjustment determined solely for 2024? b. Assuming the U.S. dollar is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2024? Note: Input all amounts as positive. Enter amounts In whole dollars. a. Positive b. Remeasurement gain translation adjustment < Prev
Transcribed Image Text:Rolfe Company (a U.S.-based company) has a subsidiary In Nigeria, where the local currency unit is the naira (NGN). On December 31 2023, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation NGN 16,240 Notes payable 10,900 Common stock 4,090 Retained earnings 40,900 (20,450) NGN 51,680 NGN 20,180 21,000 10,500 NGN 51,680 The subsidiary Issued the common stock In 2015, and acquired the land and building in 2016. It acquired the Inventory on August 1, 2023. During 2024, the following transactions took place: 2824 February 1 Paid 8,090,000 NGN on the note payable. May 1 June 1 August 1 Sold entire inventory for 16,900,000 NGN on account. Sold land for 6,090,000 NGN cash. Collected all accounts receivable. September 1 Signed long-term note to receive 8,090,000 NGN cash. Bought inventory for 20,090,000 NGN cash. October 1 November 1 December 1 Bought land for 3,090,000 NGN on account. Declared and paid 3,090,000 NGN cash dividend to parent. December 31 Recorded depreciation for the entire year of 2,045,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: NGN 1 = $ 0.0057 2015 2016 August 1, 2023 NGN 1 = = 0.0051 NGN 1 = 0.0071 December 31, 2023 February 1, 2024 May 1, 2024 June 1, 2024 NGN 1 = 0.0073 NGN 1 = 0.0075 NGN 1 = 0.0077 NGN 1 = 0.0079 August 1, 2024 NGN 1 = 0.0083 September 1, 2824 NGN 1 = 0.0085 October 1, 2024 NGN 1 = 0.0087 November 1, 2024 NGN 1 = 0.0089 December 1, 2024 NGN 1 = 0.0091 NGN 1 = 0.0102 NGN 1 = 0.0092 December 31, 2024 Average for 2824 Required: a. Assuming the NGN Is the subsidiary's functional currency, what is the translation adjustment determined solely for 2024? b. Assuming the U.S. dollar is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2024? Note: Input all amounts as positive. Enter amounts In whole dollars. a. Positive b. Remeasurement gain translation adjustment < Prev
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