Assessment 3: Foreign Currency
Foreign Currency
Problem 1
Part A
Date |
Account Title |
Credit |
Debit |
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Part B
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Year |
Interest Expense |
Foreign Exchange Loss |
Total |
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Financial Statement Translation
Prepare financial statements for a foreign subsidiary and then translate them into U.S. dollars. The first item has been completed for you as an example.
Broadmore Company Subsidiary
Income Statement
Exchange Rate |
Krone |
Exchange Rate |
U.S. Dollars |
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Rent revenue |
120,00 |
X $1.80 A = |
$216,000 |
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Interest expense |
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Depreciation expense |
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Repair expense |
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Net income |
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Statement of Retained Earnings
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Krone |
Exchange Rate |
U.S. Dollars |
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Retained earnings |
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Net income |
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Dividends paid |
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Retained earnings, 12/31 |
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Balance Sheet
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Krone |
Exchange Rate |
U.S. Dollars |
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Cash |
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Accounts receivable |
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Building |
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Accumulated depreciation |
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Total assets |
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Interest payable |
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Note payable |
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Common stock |
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Retained earnings |
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Translation adjustment |
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Total liabilities and equities |
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Computation of Translation Adjustment
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Krone |
Exchange Rate |
U.S. Dollars |
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Beginning net assets |
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Increase in net assets: Issued common stock |
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Increase in net assets: Net income |
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Decrease in net assets: Dividends paid |
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Ending net assets |
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Ending net assets at current exchange rate |
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Translation adjustment (negative) |
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