Translation: it is the most common method used and is applied when the local currency is the foreign entity’s functional currency. The subsidiary statement must be translated from its local currency to the parents’ functional currency. To translate the financial statements, the company will use the current rate, which is the exchange rate on balance sheet date, to convert the local currency. Because revenues and expenses are assumed to occur uniformly over the period, revenues and expenses on the income statement are translated using the average rate for the reporting period. Any translation adjustment that occurs is a component of comprehensive income. The method used to translate financial statement from the local currency to functional currency is called current rate method. Preparation of schedule transacting the December 31, 20X1 trial balance from Swiss francs to U.S dollars.

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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 12.5E

To determine

Translation:it is the most common method used and is applied when the local currency is the foreign entity’s functional currency. The subsidiary statement must be translated from its local currency to the parents’ functional currency. To translate the financial statements, the company will use the current rate, which is the exchange rate on balance sheet date, to convert the local currency. Because revenues and expenses are assumed to occur uniformly over the period, revenues and expenses on the income statement are translated using the average rate for the reporting period. Any translation adjustment that occurs is a component of comprehensive income. The method used to translate financial statement from the local currency to functional currency is called current rate method.

Preparation of schedule transacting the December 31, 20X1 trial balance from Swiss francs to U.S dollars.

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On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 72,000. SunTime’s December 31, 20X1, trial balance in SFr is as follows: Debit Credit Cash SFr 8,600 Accounts Receivable (net) 24,500 Receivable from Popular Creek 6,000 Inventory 26,000 Plant and Equipment 108,000 Accumulated Depreciation SFr 11,900 Accounts Payable 12,300 Bonds Payable 54,500 Common Stock 72,000 Sales 155,400 Cost of Goods Sold 73,500 Depreciation Expense 11,900 Operating Expense 31,000 Dividends Paid 16,600 Total SFr 306,100 SFr 306,100 Additional Information The receivable from Popular Creek is denominated in Swiss francs. Popular Creek's books show a $4,800 payable to SunTime. Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1. Equipment is depreciated by the straight-line…

On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 62,000. SunTime's December 31, 20 X1, trial balance in SFr is as follows: Debit Credit Cash SFr 8, 300 Accounts Receivable (net) 21,000 Receivable from Popular Creek 6,400 Inventory 30, 000 Plant & Equipment 106, 000 Accumulated Depreciation SFr 10, 400 Accounts Payable 13, 700 Bonds Payable 54,000 Common Stock 62, 000 Sales 161, 800 Cost of Goods Sold 71, 500 Depreciation Expense 10,400 Operating Expense 32, 500 Dividends Paid 15,800 Total SFr 301, 900 SFr 301, 900 Additional Information The receivable from Popular Creek is denominated in Swiss francs. Popular Creek's books show a $5, 120 payable to SunTime. Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1. Equipment is depreciated by the straight - line method with a 10-year life and no residual value. A full…

On January 1, 20X1, Himalaya Corporation organized Alps Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 120,000. Alps's December 31, 20X1, trial balance in SFr is as follows: Debit (SFr) Credit(SFr) Cash 14000 Accounts Receivable 40000 Receivable from Himalaya 10000 Inventory 50000 Plant and Equipment 200000 Accumulated Depreciation 20000 Accounts Payable 24000 Bonds Payable 100000 Common Stock 120000 Sales 300000 Cost of goods sold 140000 Depreciation Expense 20000 Operating Expense 60000 Dividend paid 30000 Total SFr564,000 SFr 564,000 Additional Information The receivable from Himalaya is denominated in Swiss francs. Himalaya's books show a $8,000 payable to Alps. Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased…

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 12.5E

To determine

Translation:it is the most common method used and is applied when the local currency is the foreign entity’s functional currency. The subsidiary statement must be translated from its local currency to the parents’ functional currency. To translate the financial statements, the company will use the current rate, which is the exchange rate on balance sheet date, to convert the local currency. Because revenues and expenses are assumed to occur uniformly over the period, revenues and expenses on the income statement are translated using the average rate for the reporting period. Any translation adjustment that occurs is a component of comprehensive income. The method used to translate financial statement from the local currency to functional currency is called current rate method.

Preparation of schedule transacting the December 31, 20X1 trial balance from Swiss francs to U.S dollars.

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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 12.5E

To determine

Translation:it is the most common method used and is applied when the local currency is the foreign entity’s functional currency. The subsidiary statement must be translated from its local currency to the parents’ functional currency. To translate the financial statements, the company will use the current rate, which is the exchange rate on balance sheet date, to convert the local currency. Because revenues and expenses are assumed to occur uniformly over the period, revenues and expenses on the income statement are translated using the average rate for the reporting period. Any translation adjustment that occurs is a component of comprehensive income. The method used to translate financial statement from the local currency to functional currency is called current rate method.

Preparation of schedule transacting the December 31, 20X1 trial balance from Swiss francs to U.S dollars.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

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 12.5E

To determine