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The following is the foreign currency balance sheet for Lee Company on December 31, 2006 (use for questions 1 and 2)   Cash                                    100,000 Fixed Assets                         30,000   Liabilities                              60,000 Common Stock                     20,000 Retained Earnings                 50,000   The following FX rates were in effect on December 31: Current (Spot) rate:  1 US= .40 FC Historical rate:         1 US= .30 FC Forward rate:           1 US= .25 FC    Assume the US dollar is the functional currency:  a. What is the US dollar value of Cash on Dec 31?   b.  What is the US dollar value of Fixed Assets on Dec 31?    c.Where is the FX remeasurement gain or loss under the temporal method at Dec 31 reported? 2. Assume the FC is the functional currency. a. What is the US dollar value of Cash on Dec 31?     b. What is the US dollar value of Fixed Assets on Dec 31?     c.Where is the FX translation adjustment under the current rate method at Dec 31 reported?

The following is the foreign currency balance sheet for Lee Company on December 31, 2006 (use for questions 1 and 2)   Cash                                    100,000 Fixed Assets                         30,000   Liabilities                              60,000 Common Stock                     20,000 Retained Earnings                 50,000   The following FX rates were in effect on December 31: Current (Spot) rate:  1 US= .40 FC Historical rate:         1 US= .30 FC Forward rate:           1 US= .25 FC    Assume the US dollar is the functional currency:  a. What is the US dollar value of Cash on Dec 31?   b.  What is the US dollar value of Fixed Assets on Dec 31?    c.Where is the FX remeasurement gain or loss under the temporal method at Dec 31 reported? 2. Assume the FC is the functional currency. a. What is the US dollar value of Cash on Dec 31?     b. What is the US dollar value of Fixed Assets on Dec 31?     c.Where is the FX translation adjustment under the current rate method at Dec 31 reported?

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 is the foreign currency balance sheet for Lee Company on December 31, 2006 (use for questions 1 and 2)

 

Cash                                    100,000

Fixed Assets                         30,000

 

Liabilities                              60,000

Common Stock                     20,000

Retained Earnings                 50,000

 

The following FX rates were in effect on December 31:

Current (Spot) rate:  1 US= .40 FC

Historical rate:         1 US= .30 FC

Forward rate:           1 US= .25 FC

 

  1.  Assume the US dollar is the functional currency:

 a. What is the US dollar value of Cash on Dec 31?

 

b.  What is the US dollar value of Fixed Assets on Dec 31?

  

c.Where is the FX remeasurement gain or loss under the temporal method at Dec 31 reported?

2. Assume the FC is the functional currency.

a. What is the US dollar value of Cash on Dec 31?

   

b. What is the US dollar value of Fixed Assets on Dec 31?

   

c.Where is the FX translation adjustment under the current rate method at Dec 31 reported?

 

ANSWER ALL (INCLUDING 1 AND 2 BOTH WITH SUB QUESTION) PLEASE. 

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