Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria, where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation 2020 Feb. 1 Paid 8,000,000 NGN on the note payable. May 1 Sold entire inventory for 16,000,000 NGN on account. June 1 Sold land for 6,000,000 NGN cash. Aug. 1 Collected all accounts receivable. 2011 2013 The subsidiary acquired the Inventory on August 1, 2019, and the land and building in 2013. It Issued the common stock in 2011. During 2020, the following transactions took place: Sept. 1 signed long-term note to receive 8,00e,eee NGN cash. oct. 1 Bought inventory for 20,000,000 NGN cash. Nov. 1 Bought land for 3,000,000 NGN on account. Dec. 1 Declared and paid 3,000,000 NGN cash dividend to parent. Dec.31 Recorded depreciation for the entire year of 2,000,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: August 1, 2019 December 31, 2019 February 1, 2020 May 1, 2020 June 1, 2020 August 1, 2020 September 1, 2020 October 1, 2020 November 1, 2020 December 1, 2020 December 31, 2020 Average for 2020 a. Positive NGN 1 = $ 0.0048 1 = 1 1 1 1 = NGN 16,eee 10,000 4,000 40,000 (20,000) NGN 50,000 1 1 1 1 1 1 = 1 1 = = = Notes payable Common stock Retained earnings 0.0042 0.0062 0.0064 0.0066 0.0068 0.0070 0.0074 0.0076 0.0078 0.0080 0.0082 0.0084 0.0074 translation adjustment a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020? (Input all amounts as positive. Enter amounts in whole dollars.) NGN 20,000 20,000 10,000 $ $ NGN 50,000 69,800 12,200
Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria, where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation 2020 Feb. 1 Paid 8,000,000 NGN on the note payable. May 1 Sold entire inventory for 16,000,000 NGN on account. June 1 Sold land for 6,000,000 NGN cash. Aug. 1 Collected all accounts receivable. 2011 2013 The subsidiary acquired the Inventory on August 1, 2019, and the land and building in 2013. It Issued the common stock in 2011. During 2020, the following transactions took place: Sept. 1 signed long-term note to receive 8,00e,eee NGN cash. oct. 1 Bought inventory for 20,000,000 NGN cash. Nov. 1 Bought land for 3,000,000 NGN on account. Dec. 1 Declared and paid 3,000,000 NGN cash dividend to parent. Dec.31 Recorded depreciation for the entire year of 2,000,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: August 1, 2019 December 31, 2019 February 1, 2020 May 1, 2020 June 1, 2020 August 1, 2020 September 1, 2020 October 1, 2020 November 1, 2020 December 1, 2020 December 31, 2020 Average for 2020 a. Positive NGN 1 = $ 0.0048 1 = 1 1 1 1 = NGN 16,eee 10,000 4,000 40,000 (20,000) NGN 50,000 1 1 1 1 1 1 = 1 1 = = = Notes payable Common stock Retained earnings 0.0042 0.0062 0.0064 0.0066 0.0068 0.0070 0.0074 0.0076 0.0078 0.0080 0.0082 0.0084 0.0074 translation adjustment a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020? (Input all amounts as positive. Enter amounts in whole dollars.) NGN 20,000 20,000 10,000 $ $ NGN 50,000 69,800 12,200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria, where the local currency unit is the naira (NGN). On December 31,
2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]):
Cash
Inventory
Land
Building
Accumulated depreciation
2020
Feb. 1 Paid 8,000,000 NGN on the note payable.
May 1 Sold entire inventory for 16,000,000 NGN on account.
June 1 Sold land for 6,000,000 NGN cash.
Aug. 1 Collected all accounts receivable.
2011
2013
The subsidiary acquired the Inventory on August 1, 2019, and the land and building in 2013. It Issued the common stock in 2011. During
2020, the following transactions took place:
Sept. 1 signed long-term note to receive 8,00e,eee NGN cash.
oct. 1 Bought inventory for 20,000,000 NGN cash.
Nov. 1 Bought land for 3,000,000 NGN on account.
Dec. 1 Declared and paid 3,000,000 NGN cash dividend to parent.
Dec.31 Recorded depreciation for the entire year of 2,000,000 NGN.
The U.S dollar ($) exchange rates for 1 NGN are as follows:
August 1, 2019
December 31, 2019
February 1, 2020
May 1, 2020
June 1, 2020
August 1, 2020
September 1, 2020
October 1, 2020
November 1, 2020
December 1, 2020
December 31, 2020
Average for 2020
a. Positive
NGN 1 = $ 0.0048
1 =
1
1
1
1
=
NGN 16,eee
10,000
4,000
40,000
(20,000)
NGN 50,000
1
1
1
1
1
1 =
1
1
=
=
=
Notes payable
Common stock
Retained earnings
0.0042
0.0062
0.0064
0.0066
0.0068
0.0070
0.0074
0.0076
0.0078
0.0080
0.0082
0.0084
0.0074
translation adjustment
a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020?
(Input all amounts as positive. Enter amounts in whole dollars.)
NGN 20,000
20,000
10,000
$
$
NGN 50,000
69,800
12,200](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8dbb1922-d0ea-4e1d-ac10-a55b00c83b36%2F7d3b1366-8b61-4574-9aff-0cd476e73378%2Fmwa6gkb_processed.png&w=3840&q=75)
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,
2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]):
Cash
Inventory
Land
Building
Accumulated depreciation
2020
Feb. 1 Paid 8,000,000 NGN on the note payable.
May 1 Sold entire inventory for 16,000,000 NGN on account.
June 1 Sold land for 6,000,000 NGN cash.
Aug. 1 Collected all accounts receivable.
2011
2013
The subsidiary acquired the Inventory on August 1, 2019, and the land and building in 2013. It Issued the common stock in 2011. During
2020, the following transactions took place:
Sept. 1 signed long-term note to receive 8,00e,eee NGN cash.
oct. 1 Bought inventory for 20,000,000 NGN cash.
Nov. 1 Bought land for 3,000,000 NGN on account.
Dec. 1 Declared and paid 3,000,000 NGN cash dividend to parent.
Dec.31 Recorded depreciation for the entire year of 2,000,000 NGN.
The U.S dollar ($) exchange rates for 1 NGN are as follows:
August 1, 2019
December 31, 2019
February 1, 2020
May 1, 2020
June 1, 2020
August 1, 2020
September 1, 2020
October 1, 2020
November 1, 2020
December 1, 2020
December 31, 2020
Average for 2020
a. Positive
NGN 1 = $ 0.0048
1 =
1
1
1
1
=
NGN 16,eee
10,000
4,000
40,000
(20,000)
NGN 50,000
1
1
1
1
1
1 =
1
1
=
=
=
Notes payable
Common stock
Retained earnings
0.0042
0.0062
0.0064
0.0066
0.0068
0.0070
0.0074
0.0076
0.0078
0.0080
0.0082
0.0084
0.0074
translation adjustment
a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020?
(Input all amounts as positive. Enter amounts in whole dollars.)
NGN 20,000
20,000
10,000
$
$
NGN 50,000
69,800
12,200
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.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