The translation adjustment that results from translating the financial statements of a foreign subsidiary using the current rate method should be: a. included in the determination of net income for the period it occurs Ob. deferred and amortized over a period not to exceed forty years U.cincluded as a separate item in the stockholders equity section of the balance sheet d. deferred until a subseguent yearwhen a loss occurs and offset against that fossi

The translation adjustment that results from translating the financial statements of a foreign subsidiary using the current rate method should be: a. included in the determination of net income for the period it occurs Ob. deferred and amortized over a period not to exceed forty years U.cincluded as a separate item in the stockholders equity section of the balance sheet d. deferred until a subseguent yearwhen a loss occurs and offset against that fossi

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

AU.S. company owns an 80.s interest in a company located on Mars, Martian currency is called the Martian Cedic. During the year the parent company sold inventory that had cost $24,900 to the subsidiary on account for $29,100 when the echange rate was fiscal period. The unsettled account is denominated in dollars. The exchange rate at the fiscal year end was 50.4994(a1) Compute the amounts that would be reported for the inventory and accounts payable in the wbsidiarys innslated balance shect. The entity's functional currency is the Martian Credit. (Round answers to O decimal ploces es, 5, 125)
Hull Manufacturing Corp. (HMC), a Canadian company, manufactures instruments used to measure the moisture content of barley and wheat. The company sells primarily to the domestic market, but in Year 3, it developed a small market in Argentina. In Year 4, HMC began purchasing semi-finished components from a supplier in Romania. The management of HMC is concerned about the possible adverse effects of foreign exchange fluctuations. To deal with this matter, all of. HMC's foreign-currency-denominated receivables and payables are hedged with contracts with the company's bank. The year-end of HMC is December 31. The following transactions occurred late in Year 4: • On October 15, Year 4, HMC purchased components from its Romanian supplier for 807,000 Romanian leus (RL). On the same day, HMC entered into a forward contract for RON807,000 at the 60-day forward rate of RON1 = $0.415. The Romanian supplier was paid in full on December 15, Year 4. • On December 1, Year 4, HMC made a shipment to a…
A translation adjustment must be calculated and disclosed when financial statements of a foreign subsidiary are translated into the parent’s reporting currency. How is this figure computed, and where is the amount reported in the financial statements?
pvn.2
On January 1, 2024, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland. The acquisition was treated as a purchase transaction. The 2024 financial statements stated in Swiss francs are given below. GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2024 Direct exchange rates for Swiss franc are: Required: A. Translate the year-end balance sheet and income statement of foreign subsidiary using the current rate method of translation. B. Prepare a schedule to verify the translation adjustment. Cash and Receivables Net Property, Plant, and Equipment 40,000 37,000 60,000 92,000 30,000 32,000 20,000 20,000 10,000 40,000 60,000 92,000 Totals Accounts and Notes Payable Common Stock Retained Earnings Totals GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2024 Jan. 1 Dec. 31 20,000 55,000 Revenues 75,000 Operating…
Forex: Translation and RemeasurementThe following assets are held by a subsidiary in a foreign country: 1. At what amount should be reported as total assets if the financial statement is to be translated as of Jan. 31?2. At what amount should be reported as total assets if the financial statement is to be remeasured as of Jan. 31?
pvn.3