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The following account balances are for the Agee Company as of January 1, 2020, and December 31, 2020. All amounts are denominated in kroner (Kr). Accounts payable. Accounts receivable Accumulated depreciation-buildings Accumulated depreciation-equipment Bonds payable-due 2023 Buildings Cash Common stock Depreciation expense Dividends (10/1/20) Equipment January 1, 2020 (8,000) 35,000 (26,000) 0 (56,000) 115,000 41,000 (65,000) 0 0 December 31, 2020 (16,500) 85,000 (31,000) (5,600) (56,000) 95,500 8,600 (80,000) 21,000 38,000 36.000

The following account balances are for the Agee Company as of January 1, 2020, and December 31, 2020. All amounts are denominated in kroner (Kr). Accounts payable. Accounts receivable Accumulated depreciation-buildings Accumulated depreciation-equipment Bonds payable-due 2023 Buildings Cash Common stock Depreciation expense Dividends (10/1/20) Equipment January 1, 2020 (8,000) 35,000 (26,000) 0 (56,000) 115,000 41,000 (65,000) 0 0 December 31, 2020 (16,500) 85,000 (31,000) (5,600) (56,000) 95,500 8,600 (80,000) 21,000 38,000 36.000

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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The following account balances are for the Agee Company as of January 1, 2020, and December 31, 2020. All amounts are denominated in kroner (Kr). Accounts payable Accounts receivable Accumulated depreciation-buildings Accumulated depreciation-equipment Bonds payable-due 2023 Buildings Cash Common stock Depreciation expense Dividends (10/1/20) Equipment Gain on sale of building Rent expense Retained earnings Salary expense Sales Utilities expense Additional Information Relevant exchange rates for 1 Kr were as follows: 2013 2014 January 1, 2020 April 1, 2020 July 1, 2020 October 1, 2020 December 31, 2020 Average for 2020 $ 2.70 2.50 2.80 2.90 3.10 3.20 3.30 3.00 January 1, 2020 (8,000) 35,000 (26,000) 0 (56,000) 115,000 41,000 (65,000) 0 • Agee issued additional shares of common stock during the year on April 1, 2020. Common stock at January 1, 2020, was sold at the start of operations in 2013. • Agee purchased buildings in 2014 and sold one building with a book value of Kr 9,100 on July 1 of the current year. o Equipment was acquired on April 1, 2020. (For all requirements, input all answers as positive.) a. Remeasurement b. Translation adjustment 0 a 0 (36,000) 0 0 0 December 31, 2020 (16,500) 85,000 (31,000) (5,600) (56,000) 95,500 8,600 (80,000) 21,000 38,000 36,000 (6,600) 17,600 (36,000) 26,000 (104,000) 8,000 a. Assuming the U.S. dollar is the functional currency, what is the remeasurement gain or loss for 2020? The December 31, 2019, U.S. dollar-translated balance sheet reported retained earnings of $80,600, which included a remeasurement loss of $12,500. b. Assuming the foreign currency is the functional currency, what is the translation adjustment for 2020? The December 31, 2019, U.S. dollar-translated balance sheet reported retained earnings of $95,000 and a cumulative translation adjustment of $12,300 (credit balance).
Transcribed Image Text:The following account balances are for the Agee Company as of January 1, 2020, and December 31, 2020. All amounts are denominated in kroner (Kr). Accounts payable Accounts receivable Accumulated depreciation-buildings Accumulated depreciation-equipment Bonds payable-due 2023 Buildings Cash Common stock Depreciation expense Dividends (10/1/20) Equipment Gain on sale of building Rent expense Retained earnings Salary expense Sales Utilities expense Additional Information Relevant exchange rates for 1 Kr were as follows: 2013 2014 January 1, 2020 April 1, 2020 July 1, 2020 October 1, 2020 December 31, 2020 Average for 2020 $ 2.70 2.50 2.80 2.90 3.10 3.20 3.30 3.00 January 1, 2020 (8,000) 35,000 (26,000) 0 (56,000) 115,000 41,000 (65,000) 0 • Agee issued additional shares of common stock during the year on April 1, 2020. Common stock at January 1, 2020, was sold at the start of operations in 2013. • Agee purchased buildings in 2014 and sold one building with a book value of Kr 9,100 on July 1 of the current year. o Equipment was acquired on April 1, 2020. (For all requirements, input all answers as positive.) a. Remeasurement b. Translation adjustment 0 a 0 (36,000) 0 0 0 December 31, 2020 (16,500) 85,000 (31,000) (5,600) (56,000) 95,500 8,600 (80,000) 21,000 38,000 36,000 (6,600) 17,600 (36,000) 26,000 (104,000) 8,000 a. Assuming the U.S. dollar is the functional currency, what is the remeasurement gain or loss for 2020? The December 31, 2019, U.S. dollar-translated balance sheet reported retained earnings of $80,600, which included a remeasurement loss of $12,500. b. Assuming the foreign currency is the functional currency, what is the translation adjustment for 2020? The December 31, 2019, U.S. dollar-translated balance sheet reported retained earnings of $95,000 and a cumulative translation adjustment of $12,300 (credit balance).
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