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 8,160,000 NGN on the note payable. May 1 Sold entire inventory for 17,600,000 NGN on account. June 1 Sold land for 6,160,000 NGN cash. 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: Aug. 1 Collected all accounts receivable. Sept. 1 Signed long-term note to receive 8,160,000 NGN cash. Oct. 1 Bought inventory for 20,160,000 NGN cash. Nov. 1 Bought land for 3,160,000 NGN on account. 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 Dec. 1 Declared and paid 3,160,000 NGN cash dividend to parent. Dec.31 Recorded depreciation for the entire year of 2,080,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: a. NGN 16,760 11,600 4,160 b. 41,600 (20,800) NGN 53,320 Positive 1 1 1 1 Remeasurement gain NGN 1 = $0.0064 1 = 1 = 1 1 - = 1 Notes payable Common stock Retained earnings 1 = 1 = 1 = 1 = 0.0058 0.0078 0.0080 0.0082 a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020? b. Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2020? (Input all amounts as positive. Enter amounts in whole dollars.) 0.0084 0.0086 0.0090 0.0092 0.0094 0.0096 0.0098 0.0116 0.0106 translation adjustment Answer is complete but not entirely correct. NGN 20,320 22,000 11,000 NGN 53,320 52,712 5,624
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 8,160,000 NGN on the note payable. May 1 Sold entire inventory for 17,600,000 NGN on account. June 1 Sold land for 6,160,000 NGN cash. 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: Aug. 1 Collected all accounts receivable. Sept. 1 Signed long-term note to receive 8,160,000 NGN cash. Oct. 1 Bought inventory for 20,160,000 NGN cash. Nov. 1 Bought land for 3,160,000 NGN on account. 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 Dec. 1 Declared and paid 3,160,000 NGN cash dividend to parent. Dec.31 Recorded depreciation for the entire year of 2,080,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: a. NGN 16,760 11,600 4,160 b. 41,600 (20,800) NGN 53,320 Positive 1 1 1 1 Remeasurement gain NGN 1 = $0.0064 1 = 1 = 1 1 - = 1 Notes payable Common stock Retained earnings 1 = 1 = 1 = 1 = 0.0058 0.0078 0.0080 0.0082 a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020? b. Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2020? (Input all amounts as positive. Enter amounts in whole dollars.) 0.0084 0.0086 0.0090 0.0092 0.0094 0.0096 0.0098 0.0116 0.0106 translation adjustment Answer is complete but not entirely correct. NGN 20,320 22,000 11,000 NGN 53,320 52,712 5,624
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Dont uplode any image in answer
![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
2011
2013
2020
Feb. 1 Paid 8,160,000 NGN on the note payable.
May 1 Sold entire inventory for 17,600,000 NGN on account.
June 1 Sold land for 6,160,000 NGN cash.
Aug. 1 Collected all accounts receivable.
Sept. 1 Signed long-term note to receive 8,160,000 NGN cash.
Oct. 1 Bought inventory for 20,160,000 NGN cash.
Nov. 1 Bought land for 3,160,000 NGN on account.
Dec. 1 Declared and paid 3,160,000 NGN cash dividend to parent.
Dec.31 Recorded depreciation for the entire year of 2,080,000 NGN.
The U.S dollar ($) exchange rates for 1 NGN are as ollows:
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
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:
a.
b.
NGN 16,760
11,600
4,160
41,600
(20,800)
NGN 53,320
Positive
NGN 1 =
1 =
Remeasurement gain ✔
1
1
1
1
1
1
1
1
1
1 =
1
=
Notes payable
Common stock
Retained earnings
$0.0064
0.0058
0.0078
0.0080
a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020?
b. Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2020?
(Input all amounts as positive. Enter amounts in whole dollars.)
0.0082
0.0084
0.0086
0.0090
0.0092
0.0094
0.0096
0.0098
0.0116
0.0106
translation
adjustment
Answer is complete but not entirely correct.
NGN 20,320
22,000
11,000
NGN 53,320
$ 52,712 X
$ 5,624✔](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F589bcaee-244c-4215-b113-65495269f2e6%2Fa0654bc2-8e3a-4734-a091-7a21c18ad3d8%2Fqbdcdo_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
2011
2013
2020
Feb. 1 Paid 8,160,000 NGN on the note payable.
May 1 Sold entire inventory for 17,600,000 NGN on account.
June 1 Sold land for 6,160,000 NGN cash.
Aug. 1 Collected all accounts receivable.
Sept. 1 Signed long-term note to receive 8,160,000 NGN cash.
Oct. 1 Bought inventory for 20,160,000 NGN cash.
Nov. 1 Bought land for 3,160,000 NGN on account.
Dec. 1 Declared and paid 3,160,000 NGN cash dividend to parent.
Dec.31 Recorded depreciation for the entire year of 2,080,000 NGN.
The U.S dollar ($) exchange rates for 1 NGN are as ollows:
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
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:
a.
b.
NGN 16,760
11,600
4,160
41,600
(20,800)
NGN 53,320
Positive
NGN 1 =
1 =
Remeasurement gain ✔
1
1
1
1
1
1
1
1
1
1 =
1
=
Notes payable
Common stock
Retained earnings
$0.0064
0.0058
0.0078
0.0080
a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020?
b. Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2020?
(Input all amounts as positive. Enter amounts in whole dollars.)
0.0082
0.0084
0.0086
0.0090
0.0092
0.0094
0.0096
0.0098
0.0116
0.0106
translation
adjustment
Answer is complete but not entirely correct.
NGN 20,320
22,000
11,000
NGN 53,320
$ 52,712 X
$ 5,624✔
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