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
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter7: Operating Assets
Section: Chapter Questions
Problem 24CE
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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).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fed47c3fd-ba2d-4390-875c-f4bd53e83b6e%2F051c3b72-8074-48f6-bb35-df68ee38d16c%2Foww5w2_processed.jpeg&w=3840&q=75)
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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