Advanced Accounting
14th Edition
ISBN: 9781260247824
Author: Joe Ben Hoyle, Thomas F. Schaefer, Timothy S. Doupnik
Publisher: RENT MCG
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Chapter 10, Problem 7P
To determine
Identify the appropriate answer for the given statement from the given choices.
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This subsidiary's functional currency is a foreign currency. What total should Orchid's balance sheet include for the preceding items?
Certain balance sheet accounts of a foreign subsidiary of Orchid Company have been stated in U.S. dollars as follows:
Current Rates
Historical Rates
Accounts Receivable, current
$200000
$220000
Accounts Receivable, long term
100000
110000
Land
50000
55000
Patents
80000
85000
Total
$430000
$470000
This subsidiary’s functional currency is a foreign currency. What total should Orchid’s balance sheet include for the preceding items? Choose the correct.a. $430,000.b. $435,000.c. $440,000.d. $450,000
Certain balance sheet accounts of a foreign subsidiary of Orchid Company have been stated in U.S. dollars as follows:
Current Rates
Historical Rates
Accounts Receivable, current
$200000
$220000
Accounts Receivable, long term
100000
110000
Land
50000
55000
Patents
80000
85000
Total
$430000
$470000
This subsidiary’s functional currency is the U.S. dollar. What total should Orchid’s balance sheet include for the preceding items?a. $430,000.b. $435,000.c. $440,000.d. $450,000.
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- Certain balance sheet accounts of a foreign subsidiary of Orchid Company have been stated in U.S. dollars as follows: Current Rates Historical Rates Accounts receivable, current $ 235,000 $255,000 Accounts receivable, long term 142,000 149,000 land 71,000 74,000 Patents 101,000 106,000 $ 549,000 $ 584,000 1. This subsidiary’s functional currency is a foreign currency. What total should Orchid’s balance sheet include for the preceding items?$557,000.$554,000.$564,000.$549,000. 2. This subsidiary’s functional currency is the U.S. dollar. What total should Orchid’s balance sheet include for the preceding items?$554,000.$557,000.$564,000.$549,000arrow_forwardAssuming that the functional currency of a foreign subsidiary is the local currency, which of the following accounts would be translated at the current rate on the Balance Sheet date (B/S Rate)? a.Additional Paid-In Capital b.Cost of Goods Sold c.Retained Earnings d.Allowance for Doubtful Accountsarrow_forwardLooking for help with these two questions. 1. Prepare financial statements (income statement, statement of retained earnings, and balance sheet) for the Canadian subsidiary in its functional currency, Canadian dollars.2. Translate the Canadian dollar functional currency financial statements into U.S. dollars so that Sendelbach can prepare consolidated financial statements.arrow_forward
- ASSUME THAT THE LOCAL CURRENCY UNIT IS THE FUNCTIONAL CURRENCY. Cade Inc. had a debit adjustment of $6400 for the year ended December 31, 2019, from restating its foreign subsidiary's accounts from their local currency units into U.S. dollars. Additionally, Cade had a receivable from a foreign customer. It is denominated in the customer's local currency. On December 31, 2018, this receivable for 300,000 local currency units (LCU) was correctly included in Cade's balance sheet at $121000. When the receivable was collected on February 15, 2019, the U.S. dollar-equivalent was $123800. In Cade's 2019 consolidated statement of income, how much should be reported as foreign exchange gain/(loss) in computing net income? BE SURE TO TYPE A SIMPLE NUMBER WITH NO COMMAS OR DOLLAR SIGNS. FOR EXAMPLE, TYPE 1000 INSTEAD OF $1,000. IF THE NUMBER IS NEGATIVE, TYPE -1000 INSTEAD OF ($1,000) Your Answer:arrow_forwardCertain balance sheet accounts of a foreign subsidiary of Orchid Company have been stated in U.S. dollars as follows: Stated at Current Rates Historical Rates Accounts receivable, current $ 276,000 $ 296,000 Accounts receivable, long term 128,000 135,000 Land 64,000 67,000 Patents 92,000 97,000 $ 560,000 $ 595,000 This subsidiary’s functional currency is the U.S. dollar. What total should Orchid’s balance sheet include for the preceding items? a. $560,000. b. $575,000. c. $565,000. d. $568,000.arrow_forwardHansabenarrow_forward
- Certain balance sheet accounts of a foreign subsidiary of Orchid Company have been stated in U.S. dollars as follows: Stated at Current Rates Historical Rates Accounts receivable, current $ 155,000 $ 175,000 Accounts receivable, long term 108,000 115,000 Land 54,000 59,000 Patents 83,000 88,000 $ 400,000 $ 437,000 This subsidiary’s functional currency is the U.S. dollar. What total should Orchid’s balance sheet include for the preceding items?arrow_forwardRolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation 2020 Feb. 1 Paid 8,120,000 NGN on the note payable. May 1 Sold entire inventory for 17,200,000 NGN on account. June 1 Sold land for 6,120,000 NGN cash. 2011 2013 NGN 16,420 11, 200 4, 120 41,200 (20,600) NGN 52,340 The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During 2020, the following transactions took place: Aug. 1 Collected all accounts receivable. Sept. 1 Signed long-term note to receive 8,120,000 NGN cash. Oct. 1 Bought inventory for 20, 120,000 NGN cash. Nov. 1 Bought land for 3,120,000 NGN on account. Dec. 1 Declared and paid 3,120,000 NGN cash dividend to parent. Dec.31 Recorded depreciation for the entire year of 2,060,000 NGN.…arrow_forwardRolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation 2011 2013 NGN 15,450 10,500 4,050 40,500 (20,250) 2020 Feb. 1 Paid 8,050,000 NGN on the note payable. May 1 Sold entire inventory for 16,500,000 NGN on account. June 1 Sold land for 6,050,000 NGN cash. Aug. 1 Collected all accounts receivable. August 1, 2019 December 31, 2019 February 1, 2020 May 1, 2020 Hay NGN 50,250 The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During 2020, the following transactions took place: Sept. 1 Signed long-term note to receive 8,050,000 NGN cash. Oct. 1 Bought inventory for 20,050,000 NGN cash. Nov. 1 Bought land for 3,050,000 NGN on account. Dec. 1 Declared and paid 3,050,000 NGN cash dividend to parent.…arrow_forward
- If the euro is chosen as the Ukraine subsidiary’s functional currency, Eurexim will translateits fi xed assets using the:A . average rate for the reporting period.B . rate in eff ect when the assets were purchased.C . rate in eff ect at the end of the reporting period.arrow_forwardIf the euro is chosen as the Ukraine subsidiary’s functional currency, Eurexim will translateits accounts receivable using the:A . rate in eff ect at the transaction date.B . average rate for the reporting period.C . rate in eff ect at the end of the reporting periodarrow_forwardIf the U.S.DOLLAR is determined to be the functional currency, which of the following is usually used to restate to US$ monetary assets and liabilities to the reporting currency? I. The average exchange rate II. The historical exchange rate III. The current exchange rate A) III only. B) Either Il or III, depending on the nature of the item. C) I only. D) II only.arrow_forward
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