Rolfe Company (a US-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 NGN 16,820 12,200 August 1, 2019 December 31, 2019 February 1, 2020 May 1, 2020 June 3, 2020 August 1, 2018 September 1, 2020 October 1, 2020 November 1, 2020 December 1, 2020 December 31, 2020 Average for 2020 4,220 42,200 (21,100) NGN 54,340 2020 Feb. 1 Paid 8,220,000 NGN on the note payable. May 1 Sold entire inventory for 18,200,000 NGN on account. June 1 Sold land for 6,220,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept. 1 Signed long-term eote to receive 8,220,000 NGN cash. Oct. 1 Bought inventory for 20,220,000 NGN cash. Nov. 1 Bought land for 3,220,000 NGN on account. Dec. 1 Declared and paid 3,220,000 NON cash dividend to parent. Dec.31 Recorded depreciation for the entire year of 2,110,000 NGN. The US dollar ($) exchange rates for 1 NGN are as follows NGN 1 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: $ 0.0070 0.0064 0.0004 0.0006 0.0006 Notes payable Common stock Retained earnings 0.009 0.0092 0.0006 0.0008 0.000 0.0102 0.0104 0.0128 0118 NGN 20,448 22,600 11,300 translation adjustment NON 54,340 4 a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020? b. Assuming the US$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2020? (input all amounts es positive. Enter amounts in whole dollars)
Rolfe Company (a US-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 NGN 16,820 12,200 August 1, 2019 December 31, 2019 February 1, 2020 May 1, 2020 June 3, 2020 August 1, 2018 September 1, 2020 October 1, 2020 November 1, 2020 December 1, 2020 December 31, 2020 Average for 2020 4,220 42,200 (21,100) NGN 54,340 2020 Feb. 1 Paid 8,220,000 NGN on the note payable. May 1 Sold entire inventory for 18,200,000 NGN on account. June 1 Sold land for 6,220,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept. 1 Signed long-term eote to receive 8,220,000 NGN cash. Oct. 1 Bought inventory for 20,220,000 NGN cash. Nov. 1 Bought land for 3,220,000 NGN on account. Dec. 1 Declared and paid 3,220,000 NON cash dividend to parent. Dec.31 Recorded depreciation for the entire year of 2,110,000 NGN. The US dollar ($) exchange rates for 1 NGN are as follows NGN 1 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: $ 0.0070 0.0064 0.0004 0.0006 0.0006 Notes payable Common stock Retained earnings 0.009 0.0092 0.0006 0.0008 0.000 0.0102 0.0104 0.0128 0118 NGN 20,448 22,600 11,300 translation adjustment NON 54,340 4 a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020? b. Assuming the US$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2020? (input all amounts es positive. Enter amounts in whole dollars)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rolfe Company (a US-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 16,820
12, 200
4,220
42,200
(21,100)
NGN 54,340
2020
Feb. 1 Paid 8,220,000 NGN on the note payable.
May 1 Sold entire inventory for 18,200,000 NGN on accou
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
June 1 Sold land for 6,220,000 NGN cash.
Aug. 1 Collected all accounts receivable.
Sept. 1 Signed long-term note to receive 8,220,000 NGN cash.
Oct. 1 Bought inventory for 20,220,000 NGN cash.
2011
2013
Nov. 1 Bought land for 3,220,008 NGN on account.
Dec. 1 Declared and paid 3,220,000 NON cash dividend to parent.
Dec.31 Recorded depreciation for the entire year of 2,110,000 NON.
The US dollar ($) exchange rates for 1 NGN are as follows
August 1, 2019:
December 31, 2019
February 1, 2020
May 1, 2020
June 3, 2020
August 1, 2028
September 1, 2020
October 1, 2820
November 1, 2020
December 1, 2020
December 31, 2820
Average for 2020
NGN 1
Notes payable
Common stock
Retained earnings
1
$ 0.0070
0.0064
0.0004
0.0006
0.000
0.0090
0.0092
0.0096
0.0098
0.0100
0.0102
0.0104
0.0128
0130
NGN 20,448
22,600
21,300
translation adualment
NGN 54,340
4
a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020?
b. Assuming the US$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2020?
(input all amounts es positive. Enter amounts in whole dollers)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fb6e5835c-1f3a-446b-8a27-7dc8f8be9e19%2F87247efd-1eec-485c-97b7-29e4fe415938%2Fywa4fua_processed.jpeg&w=3840&q=75)
Transcribed Image Text:es
Rolfe Company (a US-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 16,820
12, 200
4,220
42,200
(21,100)
NGN 54,340
2020
Feb. 1 Paid 8,220,000 NGN on the note payable.
May 1 Sold entire inventory for 18,200,000 NGN on accou
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
June 1 Sold land for 6,220,000 NGN cash.
Aug. 1 Collected all accounts receivable.
Sept. 1 Signed long-term note to receive 8,220,000 NGN cash.
Oct. 1 Bought inventory for 20,220,000 NGN cash.
2011
2013
Nov. 1 Bought land for 3,220,008 NGN on account.
Dec. 1 Declared and paid 3,220,000 NON cash dividend to parent.
Dec.31 Recorded depreciation for the entire year of 2,110,000 NON.
The US dollar ($) exchange rates for 1 NGN are as follows
August 1, 2019:
December 31, 2019
February 1, 2020
May 1, 2020
June 3, 2020
August 1, 2028
September 1, 2020
October 1, 2820
November 1, 2020
December 1, 2020
December 31, 2820
Average for 2020
NGN 1
Notes payable
Common stock
Retained earnings
1
$ 0.0070
0.0064
0.0004
0.0006
0.000
0.0090
0.0092
0.0096
0.0098
0.0100
0.0102
0.0104
0.0128
0130
NGN 20,448
22,600
21,300
translation adualment
NGN 54,340
4
a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020?
b. Assuming the US$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2020?
(input all amounts es positive. Enter amounts in whole dollers)
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