Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2024 with three assets: cash of 23,000 dinars, accounts receivable of 81,000 dinars, and land that cost 210,000 dinars when acquired on April 1, 2023. On January 1, 2024, Zugar has a 160,000 dinar note payable, and no other liabilities. On May 1, 2024, Zugar renders services to a customer for 130,000 dinars, which was immediately paid in cash. On June 1, 2024, Zugar incurred a 110,000 dinar operating expense, which was immediately paid in cash. No other transactions occurred during the year. Currency exchange rates for 1 dinar follow: April 1, 2023 January 1, 2024 May 1, 2024 June 1, 2024 December 31, 2024 Required: $ 0.43 1 dinar 0.461 dinar 0.47 1 dinar 0.49 0.51 1 dinar 1 dinar a. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the dinar is the subsidiary's functional currency. What is the translation adjustment for this subsidiary for the year 2024? b. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the U.S. dollar is the subsidiary's functional currency. What is the remeasurement gain or loss for 2024? c. Assume that Zugar is a foreign subsidiary of a U.S. multinational company. On the December 31, 2024, balance sheet, what is the translated value of the Land account? On the December 31, 2024, balance sheet, what is the remeasured value of the Land account? Note: Input all amounts as positive.
Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2024 with three assets: cash of 23,000 dinars, accounts receivable of 81,000 dinars, and land that cost 210,000 dinars when acquired on April 1, 2023. On January 1, 2024, Zugar has a 160,000 dinar note payable, and no other liabilities. On May 1, 2024, Zugar renders services to a customer for 130,000 dinars, which was immediately paid in cash. On June 1, 2024, Zugar incurred a 110,000 dinar operating expense, which was immediately paid in cash. No other transactions occurred during the year. Currency exchange rates for 1 dinar follow: April 1, 2023 January 1, 2024 May 1, 2024 June 1, 2024 December 31, 2024 Required: $ 0.43 1 dinar 0.461 dinar 0.47 1 dinar 0.49 0.51 1 dinar 1 dinar a. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the dinar is the subsidiary's functional currency. What is the translation adjustment for this subsidiary for the year 2024? b. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the U.S. dollar is the subsidiary's functional currency. What is the remeasurement gain or loss for 2024? c. Assume that Zugar is a foreign subsidiary of a U.S. multinational company. On the December 31, 2024, balance sheet, what is the translated value of the Land account? On the December 31, 2024, balance sheet, what is the remeasured value of the Land account? Note: Input all amounts as positive.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2024 with three assets: cash of 23,000
dinars, accounts receivable of 81,000 dinars, and land that cost 210,000 dinars when acquired on April 1, 2023. On January
1, 2024, Zugar has a 160,000 dinar note payable, and no other liabilities. On May 1, 2024, Zugar renders services to a
customer for 130,000 dinars, which was immediately paid in cash. On June 1, 2024, Zugar incurred a 110,000 dinar
operating expense, which was immediately paid in cash. No other transactions occurred during the year. Currency
exchange rates for 1 dinar follow:
April 1, 2023
January 1, 2024
May 1, 2024
June 1, 2024
$ 0.431 dinar
0.461 dinar
0.47 1 dinar
0.49 1 dinar
0.51 1 dinar
December 31, 2024
Required:
a. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting
currency. Assume also that the dinar is the subsidiary's functional currency. What is the translation adjustment for this
subsidiary for the year 2024?
b. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting
currency. Assume also that the U.S. dollar is the subsidiary's functional currency. What is the remeasurement gain or loss
for 2024?
c. Assume that Zugar is a foreign subsidiary of a U.S. multinational company. On the December 31, 2024, balance sheet,
what is the translated value of the Land account? On the December 31, 2024, balance sheet, what is the remeasured
value of the Land account?
Note: Input all amounts as positive.
a.
b.
C.
Translated value of land
C.
Remeasured value of land
translation adjustment
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