ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
12th Edition
ISBN: 9781265074623
Author: Christensen
Publisher: MCG CUSTOM
expand_more
expand_more
format_list_bulleted
Question
Chapter 11, Problem 11.5E
To determine
Introduction: A change in the exchange rate is referred to as the strengthening or weakening of currency against others. The strengthening of U.S. dollars against another currency will make exports expensive and the weakening of the dollar is unfavorable for U.S. companies purchasing goods from other countries.
The year-end balances on D’s records for each applicable item
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Which translation method results in a set of financial statements as if the foreign subsidiary’s transactions were carried out in US dollars?
Current rate method
Temporal method
I.
A. Prepare all entries on the Phil. firm’s books to record the above transactions
B. Determine the following:
Foreign exchange gain or loss on:i. December 1, 20x4ii. December 31, 20x4iii. March 1, 20x5
On December 31, 20x4:i. Accounts payableii. Inventory
Part 2
REQUIRED: Translate (translation working paper) the financial statements of GoldCorporation into the presentation currency which is Philippine peso.
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?
Chapter 11 Solutions
ADVANCED FIN. ACCT. LL W/ACCESS>CUSTOM<
Ch. 11 - Prob. 11.1QCh. 11 - Prob. 11.2QCh. 11 - The U.S. dollar strengthened against the European...Ch. 11 - Prob. 11.4QCh. 11 - Prob. 11.5QCh. 11 - How are assets and liabilities denominated in a...Ch. 11 - Prob. 11.7QCh. 11 - Prob. 11.8QCh. 11 - Prob. 11.9QCh. 11 - Distinguish between an exposed net asset position...
Ch. 11 - Prob. 11.11QCh. 11 - Prob. 11.12QCh. 11 - Effects of Changing Exchange Rates Analysis Since...Ch. 11 - Prob. 11.2CCh. 11 - Prob. 11.5CCh. 11 - Prob. 11.1ECh. 11 - Prob. 11.2ECh. 11 - Basic Understanding of Foreign Exposure The...Ch. 11 - Prob. 11.5ECh. 11 - Prob. 11.6ECh. 11 - Prob. 11.7ECh. 11 - Adjusting Entries for Foreign Currency Balances...Ch. 11 - Prob. 11.9ECh. 11 - Prob. 11.10ECh. 11 - Prob. 11.11.1ECh. 11 - Prob. 11.11.2ECh. 11 - Prob. 11.11.3ECh. 11 - Prob. 11.11.4ECh. 11 - Prob. 11.11.5ECh. 11 - Prob. 11.11.6ECh. 11 - Prob. 11.11.7ECh. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - Prob. 11.14.1ECh. 11 - Foreign Currency Transactions [AICPA Adapted]...Ch. 11 - Prob. 11.14.3ECh. 11 - Prob. 11.14.4ECh. 11 - Prob. 11.14.5ECh. 11 - Foreign Currency Transactions [AICPA Adapted]...Ch. 11 - Prob. 11.14.7ECh. 11 - Prob. 11.15ECh. 11 - Prob. 11.16AECh. 11 - Prob. 11.17ECh. 11 - Prob. 11.18ECh. 11 - Prob. 11.19.1ECh. 11 - Prob. 11.19.2ECh. 11 - Prob. 11.19.3ECh. 11 - Prob. 11.19.4ECh. 11 - Prob. 11.19.5ECh. 11 - Prob. 11.20.1PCh. 11 - Prob. 11.20.2PCh. 11 - Prob. 11.20.3PCh. 11 - Prob. 11.20.4PCh. 11 - Prob. 11.20.5PCh. 11 - Foreign Sales Tex Hardware sells many of its...Ch. 11 - Prob. 11.22PCh. 11 - Prob. 11.23.1PCh. 11 - Prob. 11.23.2PCh. 11 - Prob. 11.24PCh. 11 - Prob. 11.25PCh. 11 - Prob. 11.26PCh. 11 - Prob. 11.27.1PCh. 11 - Prob. 11.27.2PCh. 11 - Prob. 11.27.3PCh. 11 - Prob. 11.28APCh. 11 - Prob. 11.29.1BPCh. 11 - Prob. 11.29.2BPCh. 11 - Prob. 11.29.3BPCh. 11 - Prob. 11.29.4BPCh. 11 - Prob. 11.29.5BPCh. 11 - Prob. 11.29.6BPCh. 11 - Prob. 11.30BPCh. 11 - Prob. 11.31BPCh. 11 - Matching Key Terms Match the items in the lefthand...
Knowledge Booster
Similar questions
- Required: 1. Calculate the exchange gain or loss to be reported in 20X7. (Do not round intermediate calculations.) 2. Calculate the accounts receivable on the 31 December 20X7 statement of financial position. 3. Calculate the sales revenue to be recorded from the transactions listed above. Thumb up if you have the correct answer! Thanksarrow_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_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_forward
- Translate the following Balance sheet of XYZ Ltd. Which is an Indian based multinational company doing business in UK using Current rate, Current/Non-current method, and monetary non-Monetary and temporal method and show the Cumulative translation Adjustment. You are required to prepare the Consolidated Balance Sheet under all methods. Assume the Current rate of exchange INR/GBP as on 31“ December 2018 is 94.1041 and Historical exchange rate GBP/INR as on 1" January 2018 was 0.01063 and average rate is INR/GBP was at 86.2458 Balance sheet of XYZ Ltd as on 31 December 2018. (Parent) Assets Amount in GBP Amount in INR cash at bank 7526 624658 Deferred Tax assets 4500 373500 Receivables from debtors 5350 444050 Derivative financial assets 8635 716705 Licences Land 16000 1328000 26000 2158000 Accrued interest 871500 10500 78511 6516413 Liabilities and Equity Payables to creditors Accrued expenses Capital lease due 5456 452848 16521 1371243 11000 913000 Share capital 45534 3779322 78511…arrow_forward1. On November 1, 2020, an entity acquired on account goods from a foreign supplier at a cost of $3,000. The accounts payable are paid on January 30, 2021. On December 1, 2020, an entity sold on account goods to a foreign customer at a selling price of $2,500. The accounts receivable is collected on February 28, 2021. The entity is operating in Philippine economy wherein the functional currency is the Philippine Peso. The following exchange rates are provided Buying spot rate Selling spot rate November 1, 2020 P40 P42 December 1, 2020 39 40 December 31, 45 45.5 2020 January 30, 2021 45.5 46 February 28, 2021 46 46.5 What is the carrying amount of monetary asset on December 31, 2020?arrow_forwardTranslate the foreign currency financial statements below using the current rate (functional) method. Assume the company was incorporated, began business, and became subsidiary of an US firm on January 1, 2016, and the foreign currency was the functional currency. Date January 1, 2016 January 1, 2019 March 31, 2019 Rate 1 FC=$0.10 1 FC=$0.20 1 FC=$0.25 1 FC=$0.40 1 FC=$0.30 December 31, 2019 Weighted average for 2019 Financial Statements of Street Corporation for the year ended December 31, 2019 FC Rate Dollars Income Statement Net sales Costs and expenses Net income 10,000,000 8,000,000 2,000,000 Statement of Retained Earnings Beginning retained earnings 8,000,000 2,000,000 10,000,000 1,000,000 9,000,000 1,600,000 Net income Subtotal Dividends (declared March 31) Ending retained earnings Balance Sheet Assets Current assets Fixed assets (acquired 1/1/2016) Total assets 13,000,000 82,000,000 95,000,000 Liabilities and stockholders' equity Current liabilities |Long-term debt |Common…arrow_forward
- At what rates should the following balance sheet accounts in foreign statements be translated (using the current rate method) into U.S. dollars?arrow_forwardASSUME 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 ($1,000) Your Answer:arrow_forwardHow to translate a foreign subsidiary’s financial statements into its parent’s reporting currency using the current rate method and calculate the related translation adjustment?arrow_forward
- Problem 1: On November 1, 2020, an entity acquired on account goods from foreign supplier at a cost of 1,000 USD. The accounts payable are paid on January 30, 2021. On December 1, 2020, an entity sold on account the said goods to a foreign customer at a selling price of 1,500 USD. The accounts receivable is collected on February 28, 2021. The entity is operating in Philippine economy wherein the functional currency is the Philippine Peso. The following direct exchange rates are provided: 12/1/20 12/21/20 1/30/21 11/1/20 2/28/21 Buy Sell 40 39 45 43 42 42 40 47 46 45 What is the sales revenue to be reported by the entity for the year ended December 31, 2020? b. What is the cost of sales to be reported by the entity for the year ended December 31, 2020? What is the book value of accounts receivable on December 31, 2020? d. What is the book value of accounts payable on December 31, 2020? What is the net foreign currency gain or loss for the year ended December 31, 2020? а. С. е.arrow_forwardTristan Narvaja, S.A. (A). Tristan Narvaja, S.A., is the Uruguayan subsidiary of a U.S. manufacturing company. Its balance sheet for January 1 is shown in the popup window, E. The January 1 exchange rate between the U.S. dollar and the peso Uruguayo ($U) is $U24/$. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1, using the current rate method. a. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1st, using the current rate method. b. Calculate Tristan Narvaja's contribution to its parent's translation loss if the exchange rate on December 31st is $U24/$. Assume all peso Uruguayo accounts remain as they were at the beginning of the year. a. Using the current rate method, what is Tristan Narvaja's contribution to the translation exposure of its parent on January 1st? $U (Round to the nearest peso Uruguayo.)arrow_forwardPlease help mearrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education