The text describes the process for translating financial accounts denominated in rubles into U.S. dollars as of December 31, 2020. This is necessary for reporting purposes. The prescribed method involves using specific exchange rates for different time periods.The company began operations in 2015. Key assets such as buildings were acquired in 2016, and patents were acquired in 2018.Below is a table of exchange rates for 1 ruble in U.S. dollars for various years and specific dates:- **2015**: 1 ruble = $0.28- **2016**: 1 ruble = $0.26- **2018**: 1 ruble = $0.25- **January 1, 2020**: 1 ruble = $0.24- **April 1, 2020**: 1 ruble = $0.23- **July 1, 2020**: 1 ruble = $0.22- **October 1, 2020**: 1 ruble = $0.20- **December 31, 2020**: 1 ruble = $0.16- **Average for 2020**: 1 ruble = $0.19These exchange rates will be used to translate the ruble balances into U.S. dollars according to the current rate method. ### Foreign Currency Translation and RemeasurementThis table highlights the method of converting foreign currency accounts into the reporting currency, using both translation and remeasurement rates. Each line item is assessed for whether the chosen rate method is correct according to prescribed accounting guidelines. Here's a detailed breakdown of the table's contents:#### Columns:1. **Line Item:** Describes the financial entry being considered (e.g., Accounts payable, Cash).2. **Translation:** Shows the rate used for translating each line item, its value, and the method (e.g., Current rate, Average rate, Historical rate).3. **Remeasurement:** Specifies the rate method applied during remeasurement, and if it aligns with the correct accounting practice.#### Key:- A green checkmark (✔) indicates a correct application of the rate method.- A red cross (✖) indicates an incorrect application.### Detailed Explanation:- **Accounts Payable & Receivable:** Both translated and remeasured at the current rate ($0.16), marked as correct.- **Accumulated Depreciation—Buildings:** Translation uses the current rate ($0.16), but remeasurement should instead use $0.26, marked incorrect.- **Advertising Expense, Amortization Expense (Patents), Salary Expense, Sales:** All correctly translated using the average rate ($0.19), but incorrectly remeasured at $0.19.- **Buildings:** Translated at the current rate ($0.16), incorrect in remeasurement showing $0.26.- **Cash:** Correctly translated and remeasured at the current rate ($0.16).- **Common Stock & Dividends:** Both correctly use the historical rate for translation and remeasurement ($0.28 for stock and $0.20 for dividends).- **Depreciation Expense:** Incorrect translation using average rate ($0.16) and should use $0.26.- **Notes Payable—Due in 2023:** Correct at current rate ($0.16) for both translation and remeasurement.- **Patents (Net):** Correct translation at current rate ($0.16) but incorrect remeasurement needing $0.25.This illustrates the complexities in applying the correct rates for translation and remeasurement, each impacting financial statements differently based on whether the application is appropriate.

Indicate the exchange rate that would be used if a translation were to be performed using the…

The following accounts are denominated in rubles as f December 31, 2020. For reporting purposes, these accounts need to be stated in U.S. dollars. For each account, indicate the exchange rate that would be used to translate the ruble balance into U.S. dollars under the current rate method. The company was started in 2015. The buildings were acquired in 2016 and the patents in 2018. Exchange rates for 1 ruble are as follows: 2015 2016 2018 January 1, 2020 April 1, 2020 July 1, 2020 October 1, 2020 December 31, 2020 Average for 2020 1 ruble 1 1 1 1 1 1 1 1 = = = = = $ 0.28 0.26 0.25 0.24 0.23 0.22 0.20 0.16 0.19

The following accounts are denominated in rubles as f December 31, 2020. For reporting purposes, these accounts need to be stated in U.S. dollars. For each account, indicate the exchange rate that would be used to translate the ruble balance into U.S. dollars under the current rate method. The company was started in 2015. The buildings were acquired in 2016 and the patents in 2018. Exchange rates for 1 ruble are as follows: 2015 2016 2018 January 1, 2020 April 1, 2020 July 1, 2020 October 1, 2020 December 31, 2020 Average for 2020 1 ruble 1 1 1 1 1 1 1 1 = = = = = $ 0.28 0.26 0.25 0.24 0.23 0.22 0.20 0.16 0.19

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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