Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company. Re-measurement: It is process to measure the financial results of any other currency into functional currency. Dividend: Dividend is the return on investment . It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary. The amount dividend received by P company from S company.

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Answer 1

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 12, Problem 12.12E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The amount dividend received by P company from S company.

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The journal entries to record P company’s equity in the net income of S company and parent’s share of translation adjustment.

(c)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Calculation for the differential reported on consolidated balance sheet of December 31, 20X8 and the translation adjustment from it.

(d)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Recording the amortization of trademark in P company’s book.

e.

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

The amount of translation adjustment reported on the statement of comprehensive income as element of other comprehensive income.

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wwwww Brico Enterprises, a U.S. corporation, acquired an 80% interest in Bandar Distributors in June 2012 when 1 FC equaled $1.62. Bandar is a foreign corporation whose functional currency is the FC. The condensed pre-closing comparative trial balance for Bandar for the current year ended December 31, 2015, is as follows: Current Assets Long-Lived Assets (net) Other Assets. Cost of Sales Other Expenses. Current Liabilities Other Liabilities. Net Sales. Dividends Declared. Common Stock. Retained Earnings (beginning) Total.... Debit (Credit) December 31, 2015 December 31, 2014 165,000 FC 185,000 FC L 420,000 400,000 170,000 165,000 525,000 425,000 205,000 260,000 (175,000) (135,000) (125,000) (225,000) (820,000) 25,000 (100,000) (290,000) (865,000) 30,000 (100,000) (140,000) 0 0 Dividends are declared on March 1 of each year and are paid on March 31 of that year. The translated balance in retained earnings at the beginning of 2014 was $227,300. 1. Determine the balance in the cumulative…

Accounting for Business Combinations: ABC Company, a Philippine company, holds a 70% interest in Honesty Company, a Japanese Company. This ownership interest was acquired when Honesty was initially incorporated. The trial balance of Honesty at December 31, 2022 is as follows (see image below).The beginning inventory was 70,000 yen. The ordinary shares were issued four years ago when the exchange rate was P0.35, same with the plant and equipment. The weighted average exchange rate for 2022 was P0.53. The translated amount of retained earnings beginning was P22,500. The spot rate for the yen in various dates was: January 1, 2022 - P0.48 and December 31, 2022 - P0.58. Apply the current rate method. Answer the following subquestion: a. How much is the Cumulative Translation Adjustment at December 31, 2022? b. How much is Translated Amount of Assets? c. How much is Translated Amount of Net Income? _____________

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Answer 2

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 12, Problem 12.12E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The amount dividend received by P company from S company.

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The journal entries to record P company’s equity in the net income of S company and parent’s share of translation adjustment.

(c)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Calculation for the differential reported on consolidated balance sheet of December 31, 20X8 and the translation adjustment from it.

(d)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Recording the amortization of trademark in P company’s book.

e.

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

The amount of translation adjustment reported on the statement of comprehensive income as element of other comprehensive income.

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 12, Problem 12.12E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The amount dividend received by P company from S company.

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The journal entries to record P company’s equity in the net income of S company and parent’s share of translation adjustment.

(c)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Calculation for the differential reported on consolidated balance sheet of December 31, 20X8 and the translation adjustment from it.

(d)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Recording the amortization of trademark in P company’s book.

e.

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

The amount of translation adjustment reported on the statement of comprehensive income as element of other comprehensive income.

Expert Solution & Answer

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 12, Problem 12.12E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The amount dividend received by P company from S company.

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The journal entries to record P company’s equity in the net income of S company and parent’s share of translation adjustment.

(c)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Calculation for the differential reported on consolidated balance sheet of December 31, 20X8 and the translation adjustment from it.

(d)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Recording the amortization of trademark in P company’s book.

e.

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

The amount of translation adjustment reported on the statement of comprehensive income as element of other comprehensive income.

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Answer 5

Chapter 12, Problem 12.12E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The amount dividend received by P company from S company.

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The journal entries to record P company’s equity in the net income of S company and parent’s share of translation adjustment.

(c)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Calculation for the differential reported on consolidated balance sheet of December 31, 20X8 and the translation adjustment from it.

(d)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Recording the amortization of trademark in P company’s book.

e.

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

The amount of translation adjustment reported on the statement of comprehensive income as element of other comprehensive income.

Answer 6

Chapter 12, Problem 12.12E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The amount dividend received by P company from S company.

Answer 7

Chapter 12, Problem 12.12E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The amount dividend received by P company from S company.

Answer 8

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The journal entries to record P company’s equity in the net income of S company and parent’s share of translation adjustment.

Answer 9

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Dividend: Dividend is the return on investment. It is a part of profit of the company in which investment is made. When subsidiary pays the dividend then parent company reduces the amount of investment by the dividend amount to be received from its investment in subsidiary.

The journal entries to record P company’s equity in the net income of S company and parent’s share of translation adjustment.

Answer 10

(c)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Calculation for the differential reported on consolidated balance sheet of December 31, 20X8 and the translation adjustment from it.

Answer 11

(c)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Calculation for the differential reported on consolidated balance sheet of December 31, 20X8 and the translation adjustment from it.

Answer 12

(d)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Recording the amortization of trademark in P company’s book.

Answer 13

(d)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Recording the amortization of trademark in P company’s book.

Answer 14

e.

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

The amount of translation adjustment reported on the statement of comprehensive income as element of other comprehensive income.

Answer 15

e.

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

The amount of translation adjustment reported on the statement of comprehensive income as element of other comprehensive income.

Answer 16

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Answer 17

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Answer 18

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Answer 19

Ch. 12 - Prob. 12.1Q Ch. 12 - Prob. 12.2Q Ch. 12 - Prob. 12.3Q Ch. 12 - How widely used are IFRS? Can IFRS be used for...Ch. 12 - Prob. 12.5Q Ch. 12 - Prob. 12.6Q Ch. 12 - Prob. 12.7Q Ch. 12 - Prob. 12.8Q Ch. 12 - Prob. 12.9Q Ch. 12 - Prob. 12.10Q

Solution Summary: The author explains translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

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