ADVANCED FINANCIAL ACCT.(LL) >CUSTOM<
ADVANCED FINANCIAL ACCT.(LL) >CUSTOM<
12th Edition
ISBN: 9781260824292
Author: Christensen
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 12, Problem 12.7C

a

To determine

Introduction: Translation adjustment is the method used to convert local currency into the parents' functional currency when the local currency of foreign business is its functional currency. The current rate is used to translate the financial statements that are the exchange rate on the balance sheet date. The average rate is used to translate revenue and expenses as it is assumed that it occurs uniformly over the period. Any gain or loss on account of translation adjustment is recognized in the comprehensive income statement.

The subsidiary’s income statement ending in net income for the year.

b

To determine

Introduction: Translation adjustment is the method used to convert local currency into the parents' functional currency when the local currency of foreign business is its functional currency. The current rate is used to translate the financial statements that are the exchange rate on the balance sheet date. The average rate is used to translate revenue and expenses as it is assumed that it occurs uniformly over the period. Any gain or loss on account of translation adjustment is recognized in the comprehensive income statement.

The statement of comprehensive income for subsidiary.

c

To determine

Introduction: Translation adjustment is the method used to convert local currency into the parents' functional currency when the local currency of foreign business is its functional currency. The current rate is used to translate the financial statements that are the exchange rate on the balance sheet date. The average rate is used to translate revenue and expenses as it is assumed that it occurs uniformly over the period. Any gain or loss on account of translation adjustment is recognized in the comprehensive income statement.

The balance sheet for the year end related to subsidiary.

d

To determine

Introduction: Translation adjustment is the method used to convert local currency into the parents' functional currency when the local currency of foreign business is its functional currency. The current rate is used to translate the financial statements that are the exchange rate on the balance sheet date. The average rate is used to translate revenue and expenses as it is assumed that it occurs uniformly over the period. Any gain or loss on account of translation adjustment is recognized in the comprehensive income statement.

The major differences between the one statement format of the income statement and comprehensive income versus the two statement format of the income statement with a separate statement of comprehensive income.

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