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):CashInventoryLandBuildingAccumulated depreciation2020Feb.MayThe subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During2020, the following transactions took place:NGN 16,81012,1004,21042,100(21,050)NGN 54,17020112013Paid 8,210,000 NGN on the note payable.Sold entire inventory for 18,100,000 NGN on account.June 1 Sold land for 6,210,000 NGN cash.Aug. 1 Collected all accounts receivable.Sept. 1 Signed long-term note to receive 8,210,000 NGN cash.Oct. 1 Bought inventory for 20,210,000 NGN cash..Nov. 1 Bought land for 3,210,000 NGN on account.Dec. 1 Declared and paid 3,210,000 NGN cash dividend to parent.Dec.31 Recorded depreciation for the entire year of 2,105,000 NGN.The US dollar ($) exchange rates for 1 NGN are as follows:August 1, 2019December 31, 2019February 1, 2020May 1, 2020June 1, 2020August 1, 2020September 1, 2020October 1, 2020NGN 111 ..111 -1 W11Notes payableCommon stockRetained earnings$0.00690.00630.0083M0.00850.00070.00890.0091W 0.00950.00970.0099NGN 20,42022,50011,250***NGN 54,170Chec coups. cecm noce to AVE 8,410, U MUR Cas.Oct. 1 Bought inventory for 20,210,000 NGN cash.Nov. 1 Bought land for 3,210,000 NGN on account.Dec. 1 Declared and paid 3,210,000 NGN cash dividend to parent.Dec.31 Recorded depreciation for the entire year of 2,105,000 NGN.The U.S dollar ($) exchange rates for 1 NGN are as follows:20112013August 1, 2019December 31, 2019February 1, 2020May 1, 2020June 1, 2020August 1, 2020September 1, 2020October 1, 2020November 1, 2020December 1, 2020.December 31, 2020Average for 2020a. Positiveb.NGN 1Remeasurement gain11-1111111111M.$0.00690.00630.0083a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020?b. Assuming the U.S.$ 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.)0.00850.00870.00890.00910.00950.00970.00990.01010.01030.01260.0116translation adjustment

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 NGN 16,810 12,100 4,210 42,100 (21,050) NGN 54,170 Notes payable Common stock Retained earnings NGN 20,420 22,500 11,250 NGN 54,170 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:

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 NGN 16,810 12,100 4,210 42,100 (21,050) NGN 54,170 Notes payable Common stock Retained earnings NGN 20,420 22,500 11,250 NGN 54,170 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:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

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 NGN 16,000 Notes payable NGN 20,000 Inventory 10,000 Common stock 20,000 Land 4,000 Retained earnings 10,000 Building 40,000 Accumulated depreciation (20,000 ) NGN 50,000 NGN 50,000 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: 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. Sept. 1 Signed long-term note to receive 8,000,000 NGN cash. Oct. 1 Bought inventory for 20,000,000 NGN cash. Nov. 1…
A Katz Corporation subsidiary buys marketable equity securities and inventory on April 1, 2024, for 100,000 won each. It pays for both items on June 1, 2024, and they are still on hand at year-end. Inven- tory is carried at cost under the lower-of-cost-or-net realizable rule. Currency exchange rates in 2024 follow: January 1 April 1 June 1 December 31 ...... $0.15 1 won 0.16 = 1 0.17 = 1 0.19 = 1 10. Assume that the won is the subsidiary's functional currency. What balances does a consolidated balance sheet report as of December 31, 2024? a. Marketable equity securities = $16,000 and Inventory = $16,000 b. Marketable equity securities = $17,000 and Inventory = $17,000 c. Marketable equity securities = $19,000 and Inventory = $16,000 d. Marketable equity securities = $19,000 and Inventory = $19,000 11. Assume that the U.S. dollar is the subsidiary's functional currency. What balances does a consoli- dated balance sheet report as of December 31, 2024? a. Marketable equity securities =…
2. Assume that a FARFAR subsidiary of the U.S. MNC operates in a highly inflationary economy and keeps its balance sheet in FFAD currency. The U.S. dollar is the reporting currency of the U.S. MNC. The following table presents the balance sheet in FAAD. The subsidiary is at the end of its first year of operation. The historical exchange rate is FAAD1.60/$1.00 and the most recent exchange rate is FAAD2.00/$1.00 while the weighted average exchange rate is FAAD1.80/$1.00. The current price index is 105 at the acquisition date while the price index is 175 at the end of the reporting period. Fill out the missing entries for this FARFAR subsidiary under FASB52 of the GAAP and IAS 29 of the IFRS. (Hint: Inventory is carried at the current value on the book) Balance Sheet 1Cash Inventory (current Value = FAAD1,800) 3Net fixed assets 2 4Total Assets 5Current liabilities 6Long-term debt 7Common stock 8Retained earnings 9Total L&E Local Currency FFAD 2,100 FAAD 1,500 FAAD 3,000 FAAD 6,600 FAAD…
AU.S. company owns an 80.s interest in a company located on Mars, Martian currency is called the Martian Cedic. During the year the parent company sold inventory that had cost $24,900 to the subsidiary on account for $29,100 when the echange rate was fiscal period. The unsettled account is denominated in dollars. The exchange rate at the fiscal year end was 50.4994(a1) Compute the amounts that would be reported for the inventory and accounts payable in the wbsidiarys innslated balance shect. The entity's functional currency is the Martian Credit. (Round answers to O decimal ploces es, 5, 125)
Voltac Corporation (a U.S.-based company) has the following import/export transactions denominated in Mexican pesos in 2020: Bought inventory costing 116,000 pesos on credit. March 1 May 1 August 1 September 1 Sold 60 percent of the inventory for 96,000 pesos on credit. Collected 78,000 pesos from customers. Paid 68,000 pesos to suppliers. Currency exchange rates for 1 peso for 2020 are as follows: Date March 1 May 1 August 1 September 1 December 31 Assume that all receipts were converted into dollars as soon as they were received. For each of the following accounts, what amount will Voltac report on its 2020 financial statements? a b C d Inventory Cost of goods sold Sales Accounts receivable U.S. Dollar per Peso $ 0.25 0.26 0.27 0.28 0.29 e Accounts payable f Cash
The following balance sheet accounts of a foreign subsidiary at December 31, 2017, have been translated into U.S. dollars as follows: Translated at Current Rates Historical Rates Accounts receivable, current $ 600,000 $ 600,000 Accounts receivable, long-term 300,000 324,000 Inventories carried at market 180,000 198,000 Goodwill 190,000 220,000 $1,270,000 $ 1,402,000 What total should be included in the translated balance sheet at December 31, 2017, for the above items? Assume the U.S. dollar is the functional currency. $1,354,000 $1,270,000 $1,288,000 $1,300,000
On December 20, 2023, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 165,000 rials. Payment is received on January 10, 2024. Currency exchange rates are as follows: DateU.S. Dollar per RialDecember 20, 2023$ 1.26December 31, 20231.23January 10, 20241.19 Required: How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2023 income statement? How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2024 income statement? a. The rial receivable exchange b. The rial receivable exchange S in U.S. dollar value, resulting in a foreign of in 2023. in U.S. dollar value, resulting in a foreign of in 2024.
Bento Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on November 1, 2020, for 100,000 crowns. It paid the foreign currency account payable on January 15, 2021. The following exchange rates are relevant: Date U.S. Dollar per Crown November 1, 2020 $ 0.754 December 31, 2020 $ 0.742 January 15, 2021 $ 0.747 How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2020 income statement? How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2021 income statement?
A U.S. company's foreign subsidiary had these amounts in local currency units (LCU) in 2024: Cost of goods sold Beginning inventory Ending inventory LCU 5,230,000 536,000 622,000 The average exchange rate during 2024 was $1.30 = LCU 1. The beginning inventory was acquired when the exchange rate was $1.10 = LCU 1. Ending inventory was acquired when the exchange rate was $1.40 LCU 1. The exchange rate on December 31, 2024, was $1.45 = LCU 1. Required: Assuming that the foreign country is highly inflationary, determine the amount at which the foreign subsidiary's cost of goods sold should be reflected in the U.S. dollar income statement. Cost of goods sold
7. A foreign subsidiary of the Bart Corporation has certain balance sheet accounts on December 31, 20X2. Information relating to these accounts in U.S. dollars is as follows: Restated at Current Rates Historical Rates Marketable (Available-for-Sale and Trading) securities $ 75,000 $ 85,000 Inventories, carried at average cost Refundable deposits Goodwill 600,000 25,000 55,000 $ 755,000 700,000 30,000 70,000 $ 885,000 What total should be included in Bart's balance sheet on December 31, 20X2, as a result of the preceding information? Foreign Currency is Functional Currency $780,000 $870,000 $755,000 $880,000 U.S. Dollar is Functional Currency $870,000 $755,000 $780,000 $880,000 x
On January 1, 2024, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland. The acquisition was treated as a purchase transaction. The 2024 financial statements stated in Swiss francs are given below. GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2024 Direct exchange rates for Swiss franc are: Required: A. Translate the year-end balance sheet and income statement of foreign subsidiary using the current rate method of translation. B. Prepare a schedule to verify the translation adjustment. Cash and Receivables Net Property, Plant, and Equipment 40,000 37,000 60,000 92,000 30,000 32,000 20,000 20,000 10,000 40,000 60,000 92,000 Totals Accounts and Notes Payable Common Stock Retained Earnings Totals GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2024 Jan. 1 Dec. 31 20,000 55,000 Revenues 75,000 Operating…
4) Brief, Inc., had a receivable from a foreign customer that is payable in the customer’s local currency. On December 31, 2020, Brief correctly included this receivable for 200,000 local currency units (LCU) in its balance sheet at $110,000. When Brief collected the receivable on February 15, 2021, the U.S. dollar equivalent was $120,000. In Brief’s 2021 consolidated income statement, how much should it report as a foreign exchange gain? a) $–0– b)$10,000 c) $15,000 d) $25,000