case
chengxihe
9TranslationofForeignCurrencyFinanicalStatements.pptxMutinational Accounting Issues in Foreign Reporting and Translation of Foreign Entity Statements
Scott Becker
Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
Differential and Goodwill Calculations
Red (US) purchases Blue (European) for $63K. At the date of acquisition, Blue has FV net assets of 50K and the exchange rate is a 1.20
Fair Value of Consideration $63K
Book Value of Blue $60K ( 50K X 1.20)
Goodwill $ 3
Fair Value of Consideration $63K
Book Value of Blue 50K
Goodwill 13 What currency????
Converting Foreign Subs to US Dollars
Consolidated Financial Statements
How do we report the difference in Currency
12-
Determining the Functional Currency
Two major issues that must be addressed when financial statements are restated from a foreign currency into U.S. dollars:
Which exchange rate should be used to restate foreign currency balances to domestic currency?
How should gains and losses be accounted for? Should they be included in income?
Income Statement
Versus
OCI
12-
Determining the Functional Currency
Exchange rates that may be used in converting foreign currency values to the U.S. dollar:
The current rate
The historical rate
The average rate for the period
Or a Combination of the 3 methods
Local Currency
Versus
Functional Currency
12-
Determining the Functional Currency
Local currency
“The currency that a company keeps and maintains it books and records”
Usually in the country in which it is incorporated.
12-
Determining the Functional Currency
Functional currency
“The currency of the primary economic environment in which the entity operates; normally that is the currency of the environment in which an entity primarily generates and receives cash”
Used to differentiate between foreign operations that are self-contained and integrated into a local environment, and those that are an extension of the parent and integrated with the parent
Examples of Subsidiaries
Mexican Sub
European Sub
Parent
Parent
Sub purchases Inventory from Parent
Sub pays for inventory in $’s
Customers pay bills in $’s
A lot of support comes from Parent
Sales price determined by Parent
Sub purchases Inventory from outside company
Sub pays for inventory in euros
Customers pay bills in euros
Separate operations from Parent
Sub determines sales price
Functional Currency US $
Functional Currency Euros
Remeasurement Method
Translation Method
12-
Functional Currency Indicators
12-
Functional Currency Indicators
Functional currency designation in highly inflationary economies
The volatility of hyperinflationary currencies distorts the financial statements if the local currency is used as the foreign entity’s functional currency
In such cases, the reporting currency of the U.S. parent—the U.S. dollar—should be used as the foreign entity’s functional currency
Venezuela 1198%
Sudan 340%
Lebanon 201%
Syria 130%
Argentina 51%
Turkey 36%
Year over Year
12-
Big Picture: Foreign Currencies
Assumptions:
Pepper is a U.S.-based company
Salt is based in Italy and the functional currency is the Euro.
In order to “add them up,” they need to be stated in the same currency.
Objective:
Convert oranges to apples.
12-
Translation Versus Remeasurement of Foreign Financial Statements
Methods used to restate foreign entity statements to U.S. dollars:
The translation of the foreign entity’s functional currency statements into U.S. dollars
The remeasurement of the foreign entity’s statements into the functional currency of the entity
After remeasurement, the statements must then be translated if the functional currency is not the U.S. dollar.
No additional work is needed if the functional currency is the U.S. dollar
12-
Translation Versus Remeasurement
Translation is the most common method used
Applied when the local currency is the foreign entity’s functional currency
The current rate is used to convert local currency asset and liability accounts into U.S. dollars
Historical rates are used to convert equity accounts into U.S. dollars
Revenues and expenses are translated using the average rate for the reporting period
Any translation adjustment that occurs is a component of comprehensive income
This method is called the current rate method
12-
Translation Versus Remeasurement
Remeasurement is the restatement of the foreign entity’s financial statements from the local currency that the entity used into the foreign entity’s functional currency
Required only when the functional currency is different from the currency used to maintain the books and records of the foreign entity
The method used is called the temporal method
12-
Translation Versus Remeasurement
Example: A U.S. company owns 100% of the stock of an Argentinian company. The local currency in Argentina is the peso.
Scenario 1: The company pays employees, buys inventory, and conducts most of its operations in pesos. Thus, its functional currency is the peso.
Translate the financial statements to U.S. dollars
Scenario 2: The company pays buys and sells most of its inventory in southern Brazil. It also pays many of its employees in Brazilian reias. Thus, its functional currency is the Brazilian real.
Remeasure the financial statements to reais.
Then, translate them back to U.S. dollars.
Examples of Subsidiaries
Mexican Sub
European Sub
Parent
Parent
Sub purchases Inventory from Parent
Sub pays for inventory in $’s
Customers pay bills in $’s
A lot of support comes from Parent
Sales price determined by Parent
Sub purchases Inventory from outside company
Sub pays for inventory in euros
Customers pay bills in euros
Separate operations from Parent
Sub determines sales price
Functional Currency US $
Functional Currency Euros
Remeasurement Method
Translation Method
FC =LC
FC ≠LC
LC
LC
12-
Translation Versus Remeasurement
Summary for U.S. Parent Companies:
If LC = FC Translate to U.S. Dollars
If LC ≠ FC Remeasure to FC
If FC = U.S. dollars, no further work is needed (this is the case for subsidiaries in countries with hyperinflationary currencies)
If FC ≠ U.S. dollars Translate to U.S. Dollars (this is the case for Scenario 2 of the Argentinian company in the previous example)
LC = Local Currency
FC = Functional Currency
12-
Translation Versus Remeasurement
An overview of the methods a U.S. company would use to restate a foreign affiliate’s financial statements in U.S. dollars.
12-
Translation
Generally, accounts are translated as follows:
Note: Retained Earnings is unique (with a mixed rates).
Net income is translated using the average exchange rate
Dividends are translated using the historical rate on the date of declaration.
| Functional Currency | Rate | U.S. $ | |
| Retained Earnings 1/1 | Mixed | Use Last Year’s # | |
| + Net Income | Average | ||
| - Dividends | Historical | ||
| Retained Earnings 12/31 | Mixed |
12-
Translation
The outcome of the translation process:
Because various rates are used, the trial balance debits and credits after translation generally are not equal
The balancing item to make the translated trial balance debits equal the credits is called the translation adjustment
It by-passes the income statement and as “other comprehensive income.”
Other Comprehensive Income (OCI)
Net Income omits certain typed of gains and losses that are included in comprehensive income
Companies must report both net income and OCI and reconcile the difference between the two
It is critical to remember that net income is included in comprehensive income
Type of items considered OCI:
Unrealized gains and losses on securities
Gains and losses from foreign currency
Deferred gains or losses from derivatives
Gain and losses from amendments to retirement plans
12-
Translation
Financial statement presentation
The translation adjustment is part of the entity’s comprehensive income for the period
Comprehensive income includes net income and “other comprehensive income”
Sales
Cost of Goods sold
Gross Profit
Operating Expenses
Income from Continuing Operations
Extraordinary Items
Discontinued Operations
Net Income
Income Statement
Net Income
+/- OCI Items
Comprehensive Income
Statement of
Comprehensive Income
12-
Translation
Financial statement presentation
Major items comprising the other comprehensive income:
Foreign currency translation adjustments
Revaluation of cash flow hedges
Unrealized gains/losses on available-for-sale securities
Adjustments in the minimum pension liability item
Sales
Cost of Goods sold
Gross Profit
Operating Expenses
Income from Continuing Operations
Extraordinary Items
Discontinued Operations
Net Income
Net Income
+/- OCI Items
Comprehensive Income
12-
Translation
Each period’s other comprehensive income (OCI) is closed to accumulated other comprehensive income (AOCI)
An appropriate title, such as “Accumulated Other Comprehensive Income,” is used to describe this stockholders’ equity item
12-
Learning Objective
Prepare consolidated financial statements including a foreign subsidiary after translation.
12-
Group Exercise 1: Translation
On 1/2/X7, Padre Corp. (a U.S. based company) formed a new subsidiary in Honduras, Dodger Inc., with an initial investment of 150,000 Honduras Lempiras (HNL).
Assume Dodger:
Purchases inventory evenly throughout 20X7. The ending inventory is purchased 11/30/X7.
Uses straight-line depreciation on fixed assets.
Declares and pays dividends on 11/30/X7.
Purchased the fixed assets on 4/1/X7.
Uses Lempiras as the functional currency.
REQUIRED
Prepare a schedule to translate Dodger’s financial statements on 12/31/X7 to U.S. dollars.
12-
Group Exercise 1: Translation
12-
Group Exercise 1: Translation
12-
Group Exercise 1: Translation
Note: Beginning Retained Earnings does not appear in the trial balance because it is zero.
| Net assets at beginning of year |
| Adjustment for changes in net |
| asset position during year: |
| Net income for year |
| Dividends paid |
| Net assets at end of year | 140,000 |
| Net income: | |
| Sales | 330,000 |
| CGS | (160,000) |
| Depreciation | (10,000) |
| Oper. Expenses | (90,000) |
| Net Income | HL 70,000 |
| Net assets translated at rates during year |
| Translation |
| Rate |
| .0532 | 7,448 |
| .0553 | $ 8,295 |
| .0545 | 3,815 |
| .0535 | (4,280) |
Dollars
HL
150,000
70,000
(80,000)
$ 7,830
Padre Corporation and Subsidiary
Proof of Translation Adjustment
Year Ended December 31, 20X7
Proof of Translation Adjustment
| Change in other comprehensive income - | |||
| translation adjustment during year – net loss | $ 382 |
12-
Group Exercise 2: Translation
On 1/2/X7, Ute Corp. (a U.S. based company) formed a new subsidiary in Ireland, Irish Inc., with an initial investment of 150M Euros .
Assume Irish:
Purchases inventory evenly throughout 20X7. The ending inventory is purchased 11/30/X7.
Uses straight-line depreciation on fixed assets.
Declares and pays dividends on 11/30/X7.
Purchased the fixed assets on 4/1/X7.
Uses Euros the functional currency.
REQUIRED
Prepare a schedule to translate Irish’s financial statements on 12/31/X7 to U.S. dollars.
12-
Group Exercise2: Translation
12-
Group Exercise 2: Translation
12-
Group Exercise 2: Translation
Note: Beginning Retained Earnings does not appear in the trial balance because it is zero.
| Net assets at beginning of year |
| Adjustment for changes in net |
| asset position during year: |
| Net income for year |
| Dividends paid |
| Net assets at end of year | 140,000 |
| Net income: | |
| Sales | 330,000 |
| CGS | (160,000) |
| Depreciation | (10,000) |
| Oper. Expenses | (90,000) |
| Net Income | Euros 70,000 |
| Net assets translated at rates during year |
| Translation |
| Rate |
| 1.09 | 152,600 |
| 1.03 | $ 154,500 |
| 1.08 | 75,600 |
| 1.05 | (84,000) |
Dollars
HL
150,000
70,000
(80,000)
$ 146,100
Ute Corporation and Subsidiary
Proof of Translation Adjustment
Year Ended December 31, 20X7
Proof of Translation Adjustment
| Change in other comprehensive income - | |||
| translation adjustment during year – net increase | $ 6,500 |
-
12-
Translation Versus Remeasurement
Summary for U.S. Parent Companies:
If LC = FC Translate to U.S. Dollars
If LC ≠ FC Remeasure to FC
If FC = U.S. dollars, no further work is needed (this is the case for subsidiaries in countries with hyperinflationary currencies)
If FC ≠ U.S. dollars Translate to U.S. Dollars (this is the case for Scenario 2 of the Argentinian company in the previous example)
LC = Local Currency
FC = Functional Currency
RoadTime Company
Trial Balance Translation
December 31, 20X1
| Swiss Francs | |
| Cash | SFr 7,000 |
| Accounts Receivable (net) | 20,000 |
| Rec. from Popular Creek | 5,000 |
| Inventory | 25,000 |
| Plant and Equipment | 100,000 |
| Cost of Goods Sold | 70,000 |
| Depreciation Expense | 10,000 |
| Operating Expense | 30,000 |
| Dividends Paid (11/31/X7) | 15,000 |
| Total Debits | SFr 282,000 |
| Accumulated Depreciation | SFr 10,000 |
| Accounts Payable | 12,000 |
| Bonds Payable | 50,000 |
| Common Stock | 60,000 |
| Sales | 150,000 |
| Total | SFr 282,000 |
| Accumulated Other Comprehensive | |||
| Income — Translation Adjustment (credit) | |||
| Total Credits |
E12-5 Translation
RoadTime Company
Trial Balance Translation
December 31, 20X1
| Swiss Francs | |
| Cash | SFr 7,000 |
| Accounts Receivable (net) | 20,000 |
| Rec. from Popular Creek | 5,000 |
| Inventory | 25,000 |
| Plant and Equipment | 100,000 |
| Cost of Goods Sold | 70,000 |
| Depreciation Expense | 10,000 |
| Operating Expense | 30,000 |
| Dividends Paid | 15,000 |
| Total Debits | SFr 282,000 |
| Accumulated Depreciation | SFr 10,000 |
| Accounts Payable | 12,000 |
| Bonds Payable | 50,000 |
| Common Stock | 60,000 |
| Sales | 150,000 |
| Total | SFr 282,000 |
| Translation Rate |
| .80 |
| .80 |
| .80 |
| .80 |
| .80 |
| .75 |
| .75 |
| .75 |
| .77 |
| .80 |
| .80 |
| .80 |
| .73 |
| .75 |
| Dollars |
| $ 5,600 |
| 16,000 |
| 4,000 |
| 20,000 |
| 80,000 |
| 52,500 |
| 7,500 |
| 22,500 |
| 11,550 |
| $219,650 |
| $ 8,000 |
| 9,600 |
| 40,000 |
| 43,800 |
| 112,500 |
| $213,900 |
| Accumulated Other Comprehensive | |||
| Income — Translation Adjustment (credit) | 5,750 | ||
| Total Credits | $219,650 |
Assets and liabilities at the current rate.
Revenue and expense items at the average rates for the period.
Equity items at their historical rates.
| Net assets at beginning of year |
| Adjustment for changes in net |
| asset position during year: |
| Net income for year |
| Dividends paid |
| Net assets at end of year |
| Net income: | |
| Sales | SFr 150,000 |
| CGS | (70,000) |
| Depreciation | (10,000) |
| Oper. Expenses | (30,000) |
| Net Income | SFr 40,000 |
| Net assets translated at rates during year |
| Translation |
| Rate |
Dollars
SFr
Popular Creek Corporation and Subsidiary
Proof of Translation Adjustment
Year Ended December 31, 20X1
E12-6 Proof of Translation Adjustment
| Change in other comprehensive income - | |||
| translation adjustment during year – net increase |
| Net assets at beginning of year |
| Adjustment for changes in net |
| asset position during year: |
| Net income for year |
| Dividends paid |
| Net assets at end of year | SFr 85,000 |
| Net income: | |
| Sales | SFr 150,000 |
| CGS | (70,000) |
| Depreciation | (10,000) |
| Oper. Expenses | (30,000) |
| Net Income | SFr 40,000 |
| Net assets translated at rates during year |
| Translation |
| Rate |
| .80 | 68,000 |
| .73 | $ 43,800 |
| .75 | 30,000 |
| .77 | (11,550) |
Dollars
SFr
SFr 60,000
40,000
(15,000)
$ 62,250
The translated amount, without any adjustment.
Popular Creek Corporation and Subsidiary
Proof of Translation Adjustment
Year Ended December 31, 20X1
E12-6 Proof of Translation Adjustment
| Change in other comprehensive income - | |||
| translation adjustment during year – net increase | $ 5,750 |
E12-6 Proof of Translation Adjustment
| b. | The change in the translation adjustment of $5,750 is included as a credit in the Other Comprehensive Income on the Statement of Comprehensive Income. The Other Comprehensive Income is then accumulated and reported in the stockholders’ equity section of the consolidated balance sheet. |
| RE,1/1/X1 | $ -0- |
| Net income | 30,000 |
| Dividends | (11,550) |
| RE, 12/31/X1 | $ 18,450* |
| Balance Sheet – Equity accounts, 12/31/X1 | ||||
| Net Assets | $68,000 | Common Stock | $ 43,800 | |
| Ret. Earn.* | 18,450 | |||
| AOCI | 5,750 | |||
| Total | $68,000 | Total | $ 68,000 |
12-
Learning Objective 12-6
Make calculations and remeasure financial statements of a foreign subsidiary.
12-
Translation Versus Remeasurement
Remeasurement
Monetary balance sheet items are remeasured using the current rate
Nonmonetary balance sheet items are remeasured using historical rates
Revenues and expenses are remeasured using:
The average rate for items related to monetary items (e.g., the gain on the sale of a fixed asset)
Historical rates for income statement items related to nonmonetary items (e.g., depreciation)
Any imbalance flows through the income statement as a remeasurement gain or loss.
12-
Remeasurement
Remeasurement is similar to translation in that its goal is to obtain equivalent U.S. dollar values for the foreign affiliate’s accounts so they may be combined or consolidated with the U.S. company’s statements
The exchange rates used are different from those used for translation
12-
Monetary Accounts
Monetary Related to “Money”
By definition:
Monetary accounts are those that have their amounts “fixed” in terms of the units of currency.
They represent amounts that will be received or paid in a fixed number of monetary units.
Generally, they include:
Cash and cash equivalents
Receivables (short- and long-term)
Payables (short- and long-term)
12-
Nonmonetary Accounts
Exception: Trading and available-for-sale securities are MONETARY assets!
12-
Remeasurement Rates
| Balance sheet accounts: | |
| Monetary accounts | Current rate |
| Non-monetary accounts | Historical rate |
| Income statement accounts: | |
| Most revenues and expenses | Weighted-average rate |
| Items related to non-monetary accounts | Historical rate |
Points to remember:
PP&E: Use the historical rate on the date the parent acquires the subsidiary or the actual date an asset is acquired if after the subsidiary’s acquisition
Depreciation: Use the same historical rate for depreciation expense used for each associated asset.
12-
Remeasurement Rates
Points to remember:
COGS: Use historical rates for beginning and ending inventory and the weighted average rate for purchases.
| Functional Currency | Rate | U.S. $ | |
| Beginning Inventory | Historical on date purchased | ||
| + Purchases | Average | ||
| = Goods Available for Sale | Mixed | ||
| - Ending Inventory | Historical on date purchased | ||
| = Cost of Goods Sold | Mixed |
12-
Calculation of Purchases
Points to remember:
COGS: Use historical rates for beginning and ending inventory and the weighted average rate for purchases.
| Functional Currency | Rate | U.S. $ | |
| Beginning Inventory | Historical on date purchased | ||
| + Purchases | Average | ||
| = Goods Available for Sale | Mixed | ||
| - Ending Inventory | Historical on date purchased | ||
| = Cost of Goods Sold | Mixed |
Zero
First Year
??
400K
350K
750K
750K
Sub B/S
Sub I/S
12-
Calculation of Purchases
Points to remember:
COGS: Use historical rates for beginning and ending inventory and the weighted average rate for purchases.
| Functional Currency | Rate | U.S. $ | |
| Beginning Inventory | Historical on date purchased | ||
| + Purchases | Average | ||
| = Goods Available for Sale | Mixed | ||
| - Ending Inventory | Historical on date purchased | ||
| = Cost of Goods Sold | Mixed |
400K
First Year
??
300K
550K
450K
850K
Sub B/S
Sub I/S
12-
Remeasurement Rates
Points to remember:
Retained Earnings
Similar to translation except that while most income items are remeasured using the weighted average rate, items related to non-monetary balance sheet items are remeasured using the corresponding historical rates.
Dividends are translated using the historical rate on the date of declaration.
| Functional Currency | Rate | U.S. $ | |
| Retained Earnings 1/1 | Mixed | Use Last Year’s # | |
| + Net Income | Average and Historical | ||
| - Dividends | Historical | ||
| Retained Earnings 12/31 | Mixed |
12-
Remeasurement
The process produces the same end result as if the foreign entity’s transactions had been initially recorded in dollars
Debits = Credits in the local currency trial balance.
Because of the variety of rates used to remeasure the accounts, the debits and credits of the remeasured trial balance will generally not be equal.
A remeasurement gain or loss balances the remeasured trial balance.
The remeasurement gain or loss only exists in the subsidiary’s remeasured trial balance.
It appears on the subsidiary’s remeasured income statement, but it is not recorded via a journal entry.
12-
Remeasurement
Statement presentation
Remeasurement gain or loss is included in the current period income statement, usually under “Other Income”
Upon completion of the remeasurement process, the foreign entity’s financial statements are presented as they would have been had the U.S. dollar been used to record the transactions in the local currency as they occurred
12-
Summary of the Translation and Remeasurement Processes
12-
Proof of Remeasurement Exchange Gain
The analysis primarily involves the monetary items, because they are re-measured from the exchange rate at the beginning of the period, or on the date of the generating transaction to the current exchange rate at the end of the period
12-
Prepare consolidated financial statements including a foreign subsidiary after remeasurement.
12-
Exercise 2: Remeasurement
On 1/2/X7, Padre Corp. (a U.S. based company) formed a new subsidiary in Honduras, Dodger Inc., with an initial investment of 150,000 Honduras Lempiras (HNL).
Assume Dodger:
Purchases inventory evenly throughout 20X7. The ending inventory is purchased 11/30/X7.
Uses straight-line depreciation on fixed assets.
Declares and pays dividends on 11/30/X7.
Purchased the fixed assets on 4/1/X7.
Uses the U.S. dollar as the functional currency.
REQUIRED:
Prepare a schedule to remeasure Dodger’s financial statements on 12/31/X7 to U.S. dollars.
12-
Exercise 2: Remeasurement
12-
Exercise 2: Remeasurement
12-
Exercise 2: Remeasurement
This remeasurement gain appears in Sucursal’s income statement. As a result, it will flow into Padre’s investment and income from Sucursal accounts when Padre records its 100% share of Sucursal’s income.
Beginning RE 0
Net Income (Chart 61) 4,093
Dividends (4,280)
Ending RE (187)
12-
Group Exercise 2: Remeasurement
This remeasurement gain appears in Sucursal’s “remeasured” income statement.
No entry is required on Sucursal’s books because the gain only exists on the remeasured trial balance.
| Sales | 17,985 |
| COGS | (8,880) |
| Depreciation Expense | (550) |
| Other Expenses | (4,905) |
| Remeasurement gain | 443 |
| Net Income | 4,093 |
| RE,1/1/X1 | $ -0- |
| Net income | 4,093 |
| Dividends | (4,280) |
| RE, 12/31/X1 | $ (187) |
Proof of Remeasurement Gain (Loss)
Padre Corporation and Subsidiary
Proof of Remeasurement Loss
Year Ended Dec. 31, 20X1
Schedule 1
Statement of Net Monetary Position
| End of | |
| Year | |
| Monetary Assets: | |
| Cash | SFr 25,000 |
| Accounts Receivable (net) | 60,000 |
| Notes Receivables | 25,000 |
| Total | SFr 110,000 |
| Beginning |
| of Year |
| SFr 150,000 |
| SFr 150,000 |
| Less Monetary Liabilities: | ||
| Accounts Payable | SFr 60,000 | SFr -0- |
| Bonds and Mortgage Payable | 410,000 | -0- |
| Total | SFr(470,000) | SFr -0- |
| Net Monetary Assets Beginning of yr | SFr 150,000 |
| Net Monetary Liabilities End of yr. (SFr 470k – 110k) | SFr 360,000 |
| Change in net monetary investment during 20X1 | SFr (510,000) |
| RE,1/1/X1 | $ -0- |
| Net income | 4,093 |
| Dividends | (4,280) |
| RE, 12/31/X1 | $ (187) |
Proof of Remeasurement Gain (Loss)
Padre Corporation and Subsidiary
Proof of Remeasurement Loss
Year Ended Dec. 31, 20X1
Schedule 2
Analysis of Changes in Monetary Accounts
| Exchange | |||
| SFr | Rate | Dollars | |
| Exposed net monetary asset | |||
| Position – January 1 | SFr 150,000 | .0553 | $ 8,295 |
| Adjustments for changes in the net | |||
| monetary position during the year: | |||
| Increases: |
| Sales | 330,000 | .0545 | 17,985 |
| From other sources | -0- | -0- |
| Decreases: | |||
| From operations: | |||
| Purchases | (320,000) | .0545 | (17,440) |
| Cash expenses | (90,000) | .0545 | (4,905) |
| From dividends | (80,000) | .0535 | (4,280) |
| From purchase of | |||
| plant and equipment | (350,000) | .0550 | (19,250) |
| Exposed net monetary liability | |||
| Position – December 31 | SFr(360,000) | .0532 | (19,152) |
| Remeasurement Gain | $ 443 |
| Net monetary position prior to | |||
| remeasurement at year-end rates | $(19,595) |
Remeasurement Calculation
Purchased 100% of Sub on 1/1/20X1. Dividend was paid on 10/31/20x1. Last inventory purchase was for $8K on 10/31/20x1
Proof of Gain from Remeasurement
First Calculate Beginning and Ending Net Monetary Positions
Second, Calculate impact of Cash Flows
| Swiss Francs | |
| Cash | SFr 7,000 |
| Accounts Receivable (net) | 20,000 |
| Rec. from Popular Creek | 5,000 |
| Inventory (Purchase 11/30) | 25,000 |
| Plant and Equipment (Purch 4/1) | 100,000 |
| Cost of Goods Sold | 70,000 |
| Depreciation Expense | 10,000 |
| Operating Expense | 30,000 |
| Dividends Paid (11/30) | 15,000 |
| Total | 282,000 |
| Accumulated Depreciation | SFr 10,000 |
| Accounts Payable | 12,000 |
| Bonds Payable | 50,000 |
| Common Stock (1/2/X7) | 60,000 |
| Sales | 150,000 |
| Total | SFr 282,000 |
| (a) | Francs | Rate | Dollars |
| Beg. Inv. | -0- | ||
| Purchases | |||
| Goods Available | |||
| Less: End.Inv. | (25,000) | ||
| CoGS | 70,000 |
| Total Debits |
Road Time Company
Trial Balance Remeasurement
December 31, 20X1
Remeasurement Gain/Loss
Purchase Plant and Equip
Purchase Inventory and Dividend Payout
Road Time Co is a 100% owned sub of Popular Creek Inc.
| Swiss Francs | |
| Cash | SFr 7,000 |
| Accounts Receivable (net) | 20,000 |
| Rec. from Popular Creek | 5,000 |
| Inventory | 25,000 |
| Plant and Equipment | 100,000 |
| Cost of Goods Sold | 70,000 |
| Depreciation Expense | 10,000 |
| Operating Expense | 30,000 |
| Dividends Paid | 15,000 |
| Total | 282,000 |
| Accumulated Depreciation | SFr 10,000 |
| Accounts Payable | 12,000 |
| Bonds Payable | 50,000 |
| Common Stock | 60,000 |
| Sales | 150,000 |
| Total | SFr 282,000 |
| (a) | Francs | Rate | Dollars |
| Beg. Inv. | -0- | .75 | $ -0- |
| Purchases | 95,000 | .75 | 71,250 |
| Goods Available | 95,000 | $ 71,250 | |
| Less: End.Inv. | (25,000) | .77 | (19,250) |
| CoGS | 70,000 | $ 52,000 |
| Total Debits |
E12- 7 Remeasurement
Road Time Company
Trial Balance Remeasurement
December 31, 20X1
| Translation Rate |
| .80 |
| .80 |
| .80 |
| .77 |
| .74 |
| (a) |
| .74 |
| .75 |
| .77 |
| .74 |
| .80 |
| .80 |
| .73 |
| .75 |
| Dollars |
| $ 5,600 |
| 16,000 |
| 4,000 |
| 19,250 |
| 74,000 |
| 52,000 |
| 7,400 |
| 22,500 |
| 11,550 |
| $212,300 |
| $ 7,400 |
| 9,600 |
| 40,000 |
| 43,800 |
| 112,500 |
| $213,300 |
Remeasurement Loss
$1,000
$213,300
Monetary items at the current rate.
Nonmonetary items at their historical rates.
12-
Group Exercise 2: Remeasurement
This remeasurement gain appears in Road Time “remeasured” income statement.
No entry is required on Road Time’s books because the gain only exists on the remeasured trial balance.
| Sales | 112,500 |
| COGS | (52,000) |
| Depreciation Expense | (7,400) |
| Other Expenses | (22,500) |
| Remeasurement Loss | (1,000) |
| Net Income | 29,600 |
| RE,1/1/X1 | $ -0- |
| Net income | 29,600 |
| Dividends | (11,550) |
| RE, 12/31/X1 | $ 18,050 |
E12-8* Proof of Remeasurement Gain (Loss)
Popular Creek Corporation and Subsidiary
Proof of Remeasurement Loss
Year Ended Dec. 31, 20X1
Schedule 1
Statement of Net Monetary Position
| End of | |
| Year | |
| Monetary Assets: | |
| Cash | |
| Accounts Receivable (net) | |
| Receivables from Popular Creek | ________ |
| Total |
| Beginning |
| of Year |
| Less Monetary Liabilities: | ||
| Accounts Payable | ||
| Bonds Payable | __________ | |
| Total | ____________ | ____ |
| Net Monetary Assets |
| Net Monetary Liabilities End of yr. () |
| Change in net monetary investment during 20X1 |
E12-8* Proof of Remeasurement Gain (Loss)
Popular Creek Corporation and Subsidiary
Proof of Remeasurement Loss
Year Ended Dec. 31, 20X1
Schedule 1
Statement of Net Monetary Position
| End of | |
| Year | |
| Monetary Assets: | |
| Cash | SFr 7,000 |
| Accounts Receivable (net) | 20,000 |
| Receivables from Popular Creek | 5,000 |
| Total | SFr 32,000 |
| Beginning |
| of Year |
| SFr 60,000 |
| SFr 60,000 |
| Less Monetary Liabilities: | ||
| Accounts Payable | SFr 12,000 | SFr -0- |
| Bonds Payable | 50,000 | -0- |
| Total | SFr(62,000) | SFr -0- |
| Net Monetary Assets | SFr 60,000 |
| Net Monetary Liabilities End of yr. (SFr 62k – 32k) | SFr 30,000 |
| Change in net monetary investment during 20X1 | SFr (90,000) |
| RE,1/1/X1 | $ -0- |
| Net income | 29,600 |
| Dividends | (11,550) |
| RE, 12/31/X1 | $ 18,050* |
E12-8* Proof of Remeasurement Gain (Loss)
Popular Creek Corporation and Subsidiary
Proof of Remeasurement Loss
Year Ended Dec. 31, 20X1
Schedule 2
Analysis of Changes in Monetary Accounts
| Exchange | |||
| SFr | Rate | Dollars | |
| Exposed net monetary asset | |||
| Position – January 1 | SFr 60,000 |
| Adjustments for changes in the net | |||
| monetary position during the year: | |||
| Increases: |
| Sales | 150,000 | . | |
| From other sources | -0- | -0- |
| Decreases: | |||
| From operations: | |||
| Purchases | (95,000) | . | |
| Cash expenses | (30,000) | ||
| From dividends | (15,000) | ||
| From purchase of | |||
| plant and equipment | (100,000) | ) |
| Exposed net monetary liability | |||
| Position – December 31 | SFr(30,000) | ||
| Remeasurement loss |
| Net monetary position prior to | ||
| remeasurement at year-end rates |
E12-8* Proof of Remeasurement Gain (Loss)
Popular Creek Corporation and Subsidiary
Proof of Remeasurement Loss
Year Ended Dec. 31, 20X1
Schedule 2
Analysis of Changes in Monetary Accounts
| Exchange | |||
| SFr | Rate | Dollars | |
| Exposed net monetary asset | |||
| Position – January 1 | SFr 60,000 | .73 | $ 43,800 |
| Adjustments for changes in the net | |||
| monetary position during the year: | |||
| Increases: |
| Sales | 150,000 | .75 | 112,500 |
| From other sources | -0- | -0- |
| Decreases: | |||
| From operations: | |||
| Purchases | (95,000) | .75 | (71,250) |
| Cash expenses | (30,000) | .75 | (22,500) |
| From dividends | (15,000) | .77 | (11,550) |
| From purchase of | |||
| plant and equipment | (100,000) | .74 | (74,000) |
| Exposed net monetary liability | |||
| Position – December 31 | SFr(30,000) | .80 | (24,000) |
| Remeasurement loss | $ (1,000) |
| Net monetary position prior to | |||
| remeasurement at year-end rates | $(23,000) |
12-
Income Statement/
Balance Sheet
Format
E12-5 Translation
RoadTime Company
Trial Balance Translation
December 31, 20X1
| Swiss Francs | |
| Cash | SFr 7,000 |
| Accounts Receivable (net) | 20,000 |
| Rec. from Popular Creek | 5,000 |
| Inventory | 25,000 |
| Plant and Equipment | 100,000 |
| Cost of Goods Sold | 70,000 |
| Depreciation Expense | 10,000 |
| Operating Expense | 30,000 |
| Dividends Paid | 15,000 |
| Total Debits | SFr 282,000 |
| Accumulated Depreciation | SFr 10,000 |
| Accounts Payable | 12,000 |
| Bonds Payable | 50,000 |
| Common Stock | 60,000 |
| Sales | 150,000 |
| Total | SFr 282,000 |
| Translation Rate |
| .80 |
| .80 |
| .80 |
| .80 |
| .80 |
| .75 |
| .75 |
| .75 |
| .77 |
| .80 |
| .80 |
| .80 |
| .73 |
| .75 |
| Dollars |
| $ 5,600 |
| 16,000 |
| 4,000 |
| 20,000 |
| 80,000 |
| 52,500 |
| 7,500 |
| 22,500 |
| 11,550 |
| $219,650 |
| $ 8,000 |
| 9,600 |
| 40,000 |
| 43,800 |
| 112,500 |
| $213,900 |
| Accumulated Other Comprehensive | |||
| Income — Translation Adjustment (credit) | 5,750 | ||
| Total Credits | $219,650 |
Assets and liabilities at the current rate.
Revenue and expense items at the average rates for the period.
Equity items at their historical rates.
Translation Method
| Income Statement | Amount | Rate | US $'s |
| Sales | 150,000 | 0.75 | 112,500 |
| Cost of goods sold | (70,000) | 0.75 | (52,500) |
| Depreciation expense-equipment | (10,000) | 0.75 | (7,500) |
| Operating Expense | (30,000) | 0.75 | (22,500) |
| Income before remeasurement gain | 40,000 | 30,000 | |
| Remeasurement gain, Year 2 | |||
| Net income | 40,000 | 30,000 | |
| Plus: Retained earnings, 1/1/Y2 | - | ||
| Less: Dividends paid | (15,000) | 0.77 | (11,550) |
| Retained earnings, 12/31/Y2 | 25,000 | 18,450 | |
| Balance Sheet | |||
| Cash | 7,000 | 0.8 | 5,600 |
| Accounts receivable (net) | 20,000 | 0.8 | 16,000 |
| Rec from Parent | 5,000 | 0.8 | 4,000 |
| Inventory | 25,000 | 0.8 | 20,000 |
| Plant & Equipment | 100,000 | 0.8 | 80,000 |
| Less: accumulated depreciation | (10,000) | 0.8 | (8,000) |
| Total assets | 147,000 | 117,600 | |
| Accounts payable | 12,000 | 0.8 | 9,600 |
| Long-term debt | 50,000 | 0.8 | 40,000 |
| Common stock | 60,000 | 0.73 | 43,800 |
| Retained earnings | 25,000 | 18,450 | |
| AOCI Translation Gain | - | 5,750 | |
| Total Liability and Equity | 147,000 | 117,600 |
Under the Translation Method, the plug goes to AOCI
| RE,1/1/X1 | $ -0- |
| Net income | 30,000 |
| Dividends | (11,550) |
| RE, 12/31/X1 | $ 18,450* |
| Swiss Francs | |
| Cash | SFr 7,000 |
| Accounts Receivable (net) | 20,000 |
| Rec. from Popular Creek | 5,000 |
| Inventory | 25,000 |
| Plant and Equipment | 100,000 |
| Cost of Goods Sold | 70,000 |
| Depreciation Expense | 10,000 |
| Operating Expense | 30,000 |
| Dividends Paid | 15,000 |
| Total | 282,000 |
| Accumulated Depreciation | SFr 10,000 |
| Accounts Payable | 12,000 |
| Bonds Payable | 50,000 |
| Common Stock | 60,000 |
| Sales | 150,000 |
| Total | SFr 282,000 |
| (a) | Francs | Rate | Dollars |
| Beg. Inv. | -0- | .75 | $ -0- |
| Purchases | 95,000 | .75 | 71,250 |
| Goods Available | 95,000 | $ 71,250 | |
| Less: End.Inv. | (25,000) | .77 | (19,250) |
| CoGS | 70,000 | $ 52,000 |
| Total Debits |
E12- 7 Remeasurement
Road Time Company
Trial Balance Remeasurement
December 31, 20X1
| Translation Rate |
| .80 |
| .80 |
| .80 |
| .77 |
| .74 |
| (a) |
| .74 |
| .75 |
| .77 |
| .74 |
| .80 |
| .80 |
| .73 |
| .75 |
| Dollars |
| $ 5,600 |
| 16,000 |
| 4,000 |
| 19,250 |
| 74,000 |
| 52,000 |
| 7,400 |
| 22,500 |
| 11,550 |
| $212,300 |
| $ 7,400 |
| 9,600 |
| 40,000 |
| 43,800 |
| 112,500 |
| $213,300 |
Remeasurement Loss
$1,000
$213,300
Monetary items at the current rate.
Nonmonetary items at their historical rates.
Remeasurement Method
Under the Remeasurement Method, the plug goes to the Income Statement
| Income Statement | Amount | Rate | US $'s |
| Sales | 150,000 | 0.75 | 112,500 |
| Cost of goods sold | (70,000) | a) | (52,000) |
| Depreciation expense-equipment | (10,000) | 0.74 | (7,400) |
| Operating Expense | (30,000) | 0.75 | (22,500) |
| Income before remeasurement gain | 40,000 | 30,600 | |
| Remeasurement gain, Year 2 | -1000 | ||
| Net income | 40,000 | 29,600 | |
| Plus: Retained earnings, 1/1/Y2 | - | ||
| Less: Dividends paid | (15,000) | 0.77 | (11,550) |
| Retained earnings, 12/31/Y2 | 25,000 | 18,050 | |
| Balance Sheet | |||
| Cash | 7,000 | 0.8 | 5,600 |
| Accounts receivable (net) | 20,000 | 0.8 | 16,000 |
| Rec from Parent | 5,000 | 0.8 | 4,000 |
| Inventory | 25,000 | 0.77 | 19,250 |
| Plant & Equipment | 100,000 | 0.74 | 74,000 |
| Less: accumulated depreciation | (10,000) | 0.74 | (7,400) |
| Total assets | 147,000 | 111,450 | |
| Accounts payable | 12,000 | 0.8 | 9,600 |
| Long-term debt | 50,000 | 0.8 | 40,000 |
| Common stock | 60,000 | 0.73 | 43,800 |
| Retained earnings | 25,000 | 18,050 | |
| AOCI Translation Gain | - | - | |
| Total Equity and Liability | 147,000 | 111,450 |
| (a) | Francs | Rate | Dollars |
| Beg. Inv. | -0- | .75 | $ -0- |
| Purchases | 95,000 | .75 | 71,250 |
| Goods Available | 95,000 | $ 71,250 | |
| Less: End.Inv. | (25,000) | .77 | (19,250) |
| CoGS | 70,000 | $ 52,000 |
| Sales | 112,500 |
| COGS | (52,000) |
| Depreciation Expense | (7,400) |
| Other Expenses | (22,500) |
| Remeasurement Loss | (1,000) |
| Net Income | 29,600 |
Remeasurement Method
| Income Statement | Amount | Rate | US $'s |
| Sales | 150,000 | 0.75 | 112,500 |
| Cost of goods sold | (70,000) | a) | (52,000) |
| Depreciation expense-equipment | (10,000) | 0.74 | (7,400) |
| Operating Expense | (30,000) | 0.75 | (22,500) |
| Income before remeasurement gain | 40,000 | 30,600 | |
| Remeasurement gain, Year 2 | -1000 | ||
| Net income | 40,000 | 29,600 | |
| Plus: Retained earnings, 1/1/Y2 | - | ||
| Less: Dividends paid | (15,000) | 0.77 | (11,550) |
| Retained earnings, 12/31/Y2 | 25,000 | 18,050 | |
| Balance Sheet | |||
| Cash | 7,000 | 0.8 | 5,600 |
| Accounts receivable (net) | 20,000 | 0.8 | 16,000 |
| Rec from Parent | 5,000 | 0.8 | 4,000 |
| Inventory | 25,000 | 0.77 | 19,250 |
| Plant & Equipment | 100,000 | 0.74 | 74,000 |
| Less: accumulated depreciation | (10,000) | 0.74 | (7,400) |
| Total assets | 147,000 | 111,450 | |
| Accounts payable | 12,000 | 0.8 | 9,600 |
| Long-term debt | 50,000 | 0.8 | 40,000 |
| Common stock | 60,000 | 0.73 | 43,800 |
| Retained earnings | 25,000 | 18,050 | |
| AOCI Translation Gain | - | - | |
| Total Equity and Liability | 147,000 | 111,450 |
| (a) | Francs | Rate | Dollars |
| Beg. Inv. | -0- | .75 | $ -0- |
| Purchases | 95,000 | .75 | 71,250 |
| Goods Available | 95,000 | $ 71,250 | |
| Less: End.Inv. | (25,000) | .77 | (19,250) |
| CoGS | 70,000 | $ 52,000 |
| Sales | 112,500 |
| COGS | (52,000) |
| Depreciation Expense | (7,400) |
| Other Expenses | (22,500) |
| Remeasurement Loss | (1,000) |
| Net Income | 29,600 |
| RE,1/1/X1 | $ -0- |
| Net income | 29,600 |
| Dividends | (11,550) |
| RE, 12/31/X1 | $ 18,050 |
Conclusion
The End
12-
image1.png
image4.png
image5.png
image6.png
image7.jpeg
image8.png
image9.jpeg
image10.jpeg
image11.png
image12.emf
Workbook1.xlsx
Big Picture
| Sub's Results for 2009 (based on Book Values): | |||||||||||||||
| Reported Income | 78,000 | ||||||||||||||
| Dividends Declared | 45,500 | ||||||||||||||
| Adjustment to Salt's 2009 income on Pepper's books: | |||||||||||||||
| Lower COGS (because inventory is worth less) | (6,500) | ||||||||||||||
| Extra depreciation on equipment | 8,500 | ||||||||||||||
| Extra amortization of contract | 13,000 | ||||||||||||||
| Total increase in expenses/decrease in income | 15,000 | ||||||||||||||
| Salt's income based on Fair Values | 63,000 | ||||||||||||||
| Pepper, Inc. and Salt, Inc. | |||||||||||||||
| Consolidated Worksheet as of December 31, 2009 | |||||||||||||||
| Consolidation Entries | Consoli- | ||||||||||||||
| Pepper | Salt | DR | CR | dated | |||||||||||
| Income Statement: | |||||||||||||||
| Sales | 1,235,000 | 780,000 | |||||||||||||
| Cost of Sales | (598,000) | (370,500) | |||||||||||||
| Depreciation Expense | (78,000) | (19,500) | |||||||||||||
| S&A Expense | (481,000) | (312,000) | |||||||||||||
| Equity in Net Income | 63,000 | ||||||||||||||
| Net Income | 141,000 | 78,000 | |||||||||||||
| Statement of RE: | |||||||||||||||
| Balance, 1/1/08 | 455,000 | 117,000 | (1) | To record 100% share of Salt's reported income: | |||||||||||
| Add: Net Income | 141,000 | 78,000 | Investment in Salt | 78,000 | |||||||||||
| Less: Dividends | (104,000) | (45,500) | Equity in NI of Salt | 78,000 | |||||||||||
| Balance, 12/31/08 | 492,000 | 149,500 | |||||||||||||
| Balance Sheet: | (2) | To record 100% of Salt's dividends declared: | |||||||||||||
| Cash | 77,500 | 32,500 | Dividend Receivable | 45,500 | |||||||||||
| Accounts Receivable | 123,500 | 78,000 | Investment in Salt | 45,500 | |||||||||||
| Inventory | 149,500 | 156,000 | |||||||||||||
| Investment in Salt: | (3) | To record additional expenses (based on FMV): | |||||||||||||
| Book Value | 279,500 | Equity in NI of Salt | 15,000 | ||||||||||||
| Excess Cost | 180,500 | Investment in Salt | 15,000 | ||||||||||||
| Land | 130,000 | 91,000 | |||||||||||||
| Build & Equip | 325,000 | 291,200 | Goodwill = | Investment in Salt | Equity in NI of Salt | ||||||||||
| Acc Depreciation | (273,000) | (76,700) | 26,000 | BB | 442,500 | ||||||||||
| Covenant N-T-C | Identifiable Excess = | NI | 78,000 | 78,000 | NI | ||||||||||
| Goodwill | 169,500 | 45,500 | Dividend | ||||||||||||
| Total Assets | 992,500 | 572,000 | Book Value = | 15,000 | Excess Amort. | 15,000 | |||||||||
| Payables & Accruals | 84,500 | 97,500 | 247,000 | EB | 460,000 | 63,000 | Adj. Balance | ||||||||
| Long-term Debt | 26,000 | 195,000 | 279,500 | Basic | 78,000 | ||||||||||
| Common Stock | 390,000 | 130,000 | Goodwill = | 180,500 | Excess Reclass | 15,000 | Excess Amort. | ||||||||
| Retained Earnings | 492,000 | 149,500 | 26,000 | 0 | 0 | ||||||||||
| Total Liab & Equity | 992,500 | 572,000 | Identifiable Excess = | ||||||||||||
| 154,500 | |||||||||||||||
| Book Value = | |||||||||||||||
| 279,500 | |||||||||||||||
| Pepper, Inc. and Salt, Inc. | I. Analysis of Investment account - Book Value Element | ||||||||||||||
| Consolidated Worksheet as of December 31, 2009 | Pepper's Investment Account, BV | Salt's Equity Accounts, BV | |||||||||||||
| Consolidation Entries | Consoli- | = | Common Stock | + Add PIC | + Retained Earnings | ||||||||||
| Pepper | Salt | Dr. | Cr. | dated | Balances, 1/1/09 | 247,000 | 130,000 | 0 | 117,000 | ||||||
| Income Statement: | Add: Equity in NI | 78,000 | 78,000 | ||||||||||||
| Sales | 1,235,000 | 780,000 | 2,015,000 | Less: Dividends | (45,500) | (45,500) | |||||||||
| Cost of Sales | (598,000) | (370,500) | 6,500 | (962,000) | Balances, 12/31/09 | 279,500 | 130,000 | 0 | 149,500 | ||||||
| Depreciation Expense | (78,000) | (19,500) | 8,500 | (106,000) | |||||||||||
| S&A Expense | (481,000) | (312,000) | 13,000 | (806,000) | The Basic Elimination Entry: | ||||||||||
| Equity in Net Income | 63,000 | 78,000 | 15,000 | 0 | Common Stock | 130,000 | |||||||||
| Net Income | 141,000 | 78,000 | 99,500 | 21,500 | 141,000 | Ret Earnings, 1/1/09 | 117,000 | ||||||||
| Statement of RE: | Equity in Net Income of Salt | 78,000 | |||||||||||||
| Balance, 1/1/08 | 455,000 | 117,000 | 117,000 | 455,000 | Dividends Declared | 45,500 | |||||||||
| Add: Net Income | 141,000 | 78,000 | 99,500 | 21,500 | 141,000 | Investment in Salt | 279,500 | ||||||||
| Less: Dividends | (104,000) | (45,500) | 45,500 | (104,000) | |||||||||||
| Balance, 12/31/08 | 492,000 | 149,500 | 216,500 | 67,000 | 492,000 | II. Analysis of Investment account - Excess Cost Elements | |||||||||
| Balance Sheet: | Salt's Under or (over)-Valuation of Net Assets Element | ||||||||||||||
| Cash | 77,500 | 32,500 | 110,000 | Pepper's Invest Acct, Excess Cost | = | Inventory | Land | Equipment | Acc Dep | Covenant | Goodwill | ||||
| Accounts Receivable | 123,500 | 78,000 | 201,500 | Remaining Life | 2 months | Indefinite | 10 years | 4 years | |||||||
| Inventory | 149,500 | 156,000 | 305,500 | Balances, 1/1/09 | 195,500 | (6,500) | 39,000 | 85,000 | 52,000 | 26,000 | |||||
| Investment in Salt: | Less: Amortization | (15,000) | 6,500 | 0 | (8,500) | (13,000) | |||||||||
| Book Value | 279,500 | 279,500 | 0 | Balances, 12/31/09 | 180,500 | 0 | 39,000 | 85,000 | (8,500) | 39,000 | 26,000 | ||||
| Excess Cost | 180,500 | 180,500 | 0 | The Excess Value Reclassification Entry: | The Amortized Excess Value Reclass.Entry: | ||||||||||
| Land | 130,000 | 91,000 | 39,000 | 260,000 | Land | 39,000 | Depreciation Expense | 8,500 | |||||||
| Build & Equip | 325,000 | 291,200 | 85,000 | 57,200 | 644,000 | Build & Equip | 85,000 | S&A Expense | 13,000 | ||||||
| Acc Depreciation | (273,000) | (76,700) | 57,200 | 8,500 | (301,000) | Covenant N-T-C | 39,000 | Cost of Sales | 6,500 | ||||||
| Covenant N-T-C | 39,000 | 39,000 | Goodwill | 26,000 | Equity in Net Income of Salt | 15,000 | |||||||||
| Goodwill | 26,000 | 26,000 | Accumulated Depreciation | 8,500 | The Acc. Depr. Elimination Entry: | ||||||||||
| Total Assets | 992,500 | 572,000 | 246,200 | 525,700 | 1,285,000 | Investment in Salt | 180,500 | Acc Dep | 57,200 | ||||||
| Payables & Accruals | 84,500 | 97,500 | 182,000 | Build & Equipment | 57,200 | ||||||||||
| Long-term Debt | 26,000 | 195,000 | 221,000 | ||||||||||||
| Common Stock | 390,000 | 130,000 | 130,000 | 390,000 | |||||||||||
| Retained Earnings | 492,000 | 149,500 | 216,500 | 67,000 | 492,000 | ||||||||||
| Total Liab & Equity | 992,500 | 572,000 | 346,500 | 67,000 | 1,285,000 | ||||||||||
E12-5
| E12-5 Translation | |||
| Rates: | |||
| January 1 | 0.73 | ||
| March 1 | 0.74 | ||
| November 1 | 0.77 | ||
| December 31 | 0.80 | ||
| Average | 0.75 | ||
| Swiss | Translation | U.S. | |
| Francs | Rate | Dollars | |
| Cash | 7,000 | 0.80 | 5,600 |
| Accounts Receivable (net) | 20,000 | 0.80 | 16,000 |
| Receivable from Popular Creek | 5,000 | 0.80 | 4,000 |
| Inventory | 25,000 | 0.80 | 20,000 |
| Plant and Equipment | 100,000 | 0.80 | 80,000 |
| Cost of Goods Sold | 70,000 | 0.75 | 52,500 |
| Depreciation Expense | 10,000 | 0.75 | 7,500 |
| Operating Expense | 30,000 | 0.75 | 22,500 |
| Dividends Paid | 15,000 | 0.77 | 11,550 |
| Total Debits | 282,000 | 219,650 | |
| Accumulated Depreciation | 10,000 | 0.80 | 8,000 |
| Accounts Payable | 12,000 | 0.80 | 9,600 |
| Bonds Payable | 50,000 | 0.80 | 40,000 |
| Common Stock | 60,000 | 0.73 | 43,800 |
| Sales | 150,000 | 0.75 | 112,500 |
| Total | 282,000 | 213,900 | |
| Accumulated Other Comprehensive | |||
| Income — Translation | |||
| Adjustment (credit) | 5,750 | ||
| Total Credits | 219,650 |
E12-7
| E12-7 Remeasurement | |||
| Rates: | |||
| January 1 | 0.73 | ||
| March 1 | 0.74 | ||
| November 1 | 0.77 | ||
| December 31 | 0.80 | ||
| Average | 0.75 | ||
| Swiss | U.S. | ||
| Francs | Rate | Dollars | |
| Cash | 7,000 | 0.80 | 5,600 |
| Accounts Receivable (net) | 20,000 | 0.80 | 16,000 |
| Receivables from Popular Creek | 5,000 | 0.80 | 4,000 |
| Inventory | 25,000 | 0.77 | 19,250 |
| Plant and Equipment | 100,000 | 0.74 | 74,000 |
| Cost of Goods Sold | 70,000 | (a) | 52,000 |
| Depreciation Expense | 10,000 | 0.74 | 7,400 |
| Operating Expense | 30,000 | 0.75 | 22,500 |
| Dividends Paid | 15,000 | 0.77 | 11,550 |
| Total | 282,000 | 212,300 | |
| Remeasurement Loss | 1,000 | ||
| Total Debits | 213,300 | ||
| Accumulated Depreciation | 10,000 | 0.74 | 7,400 |
| Accounts Payable | 12,000 | 0.80 | 9,600 |
| Bonds Payable | 50,000 | 0.80 | 40,000 |
| Common Stock | 60,000 | 0.73 | 43,800 |
| Sales | 150,000 | 0.75 | 112,500 |
| Total Credits | 282,000 | 213,300 | |
| Swiss | U.S. | ||
| (a) Cost of Goods Sold: | Francs | Rate | Dollars |
| Beginning Inventory | 0 | 0.75 | 0 |
| Purchases | 95,000 | 0.75 | 71,250 |
| Goods Available for Sale | 95,000 | 71,250 | |
| Less: Ending Inventory | (25,000) | 0.77 | (19,250) |
| Cost of Goods Sold | 70,000 | 52,000 |
Comparison
| E12-5 Translation | E12-7 Remeasurement | |||||||||||
| Swiss | Translation | U.S. | Swiss | U.S. | Rate | U.S. $ | ||||||
| Francs | Rate | Dollars | Francs | Rate | Dollars | Difference: | Difference: | |||||
| Cash | 7,000 | 0.80 | 5,600 | Cash | 7,000 | 0.80 | 5,600 | 0 | ||||
| Accounts Receivable (net) | 20,000 | 0.80 | 16,000 | Accounts Receivable (net) | 20,000 | 0.80 | 16,000 | 0 | ||||
| Receivable from Popular Creek | 5,000 | 0.80 | 4,000 | Receivables from Popular Creek | 5,000 | 0.80 | 4,000 | 0 | ||||
| Inventory | 25,000 | 0.80 | 20,000 | Inventory | 25,000 | 0.77 | 19,250 | 0 | 750 | |||
| Plant and Equipment | 100,000 | 0.80 | 80,000 | Plant and Equipment | 100,000 | 0.74 | 74,000 | 0 | 6,000 | |||
| Cost of Goods Sold | 70,000 | 0.75 | 52,500 | Cost of Goods Sold | 70,000 | (a) | 52,000 | 500 | ||||
| Depreciation Expense | 10,000 | 0.75 | 7,500 | Depreciation Expense | 10,000 | 0.74 | 7,400 | 0 | 100 | |||
| Operating Expense | 30,000 | 0.75 | 22,500 | Operating Expense | 30,000 | 0.75 | 22,500 | 0 | ||||
| Dividends Paid | 15,000 | 0.77 | 11,550 | Dividends Paid | 15,000 | 0.77 | 11,550 | 0 | ||||
| Total Debits | 282,000 | 219,650 | Total | 282,000 | 212,300 | 7,350 | 7,350 | |||||
| Remeasurement Loss | 1,000 | |||||||||||
| Total Debits | 213,300 | |||||||||||
| Accumulated Depreciation | 10,000 | 0.80 | 8,000 | Accumulated Depreciation | 10,000 | 0.74 | 7,400 | 0 | 600 | |||
| Accounts Payable | 12,000 | 0.80 | 9,600 | Accounts Payable | 12,000 | 0.80 | 9,600 | 0 | ||||
| Bonds Payable | 50,000 | 0.80 | 40,000 | Bonds Payable | 50,000 | 0.80 | 40,000 | 0 | ||||
| Common Stock | 60,000 | 0.73 | 43,800 | Common Stock | 60,000 | 0.73 | 43,800 | 0 | ||||
| Sales | 150,000 | 0.75 | 112,500 | Sales | 150,000 | 0.75 | 112,500 | 0 | ||||
| Total | 282,000 | 213,900 | Total Credits | 282,000 | 213,300 | 600 | ||||||
| Accumulated Other Comprehensive | ||||||||||||
| Income — Translation | ||||||||||||
| Adjustment (credit) | 5,750 | Swiss | U.S. | |||||||||
| Total Credits | 219,650 | (a) Cost of Goods Sold: | Francs | Rate | Dollars | 6,750 | ||||||
| Beginning Inventory | 0 | 0.75 | 0 | |||||||||
| Purchases | 95,000 | 0.75 | 71,250 | |||||||||
| Goods Available for Sale | 95,000 | 71,250 | ||||||||||
| Less: Ending Inventory | (25,000) | 0.77 | (19,250) | |||||||||
| Cost of Goods Sold | 70,000 | 52,000 |
Sheet3
image13.jpeg
image14.jpeg
image15.png
image16.png
image17.emf
image18.emf
Workbook2.xlsx
Sheet1
| Account | Honduras | Rate | U.S. |
| Limpiras | Dollars | ||
| Cash | 25,000 | ||
| Accounts Receivable | 60,000 | ||
| Inventory | 160,000 | ||
| Note Receivable | 25,000 | ||
| Plant and Equipment | 350,000 | ||
| Cost of Goods Sold | 160,000 | ||
| Depreciation Expense | 10,000 | ||
| Other Expenses | 90,000 | ||
| Dividends | 80,000 | ||
| Total Debits | 960,000 | ||
| Accumulated Depreciation | 10,000 | ||
| Accounts Payable | 60,000 | ||
| Bonds Payable | 180,000 | ||
| Mortgage Payable | 230,000 | ||
| Common Stock | 150,000 | ||
| Sales | 330,000 | ||
| Total Credits | 960,000 | ||
Sheet2
Sheet3
Workbook3.xlsx
Sheet1
| Exchange Rates | ||||||
| Account | Honduras | Translation | U.S. | |||
| Limpiras | Rate | Dollars | 1/2/X7 | 0.0553 | ||
| Cash | 25,000 | 4/1/X7 | 0.0550 | |||
| Accounts Receivable | 60,000 | 11/30/X7 | 0.0535 | |||
| Inventory | 160,000 | 12/31/X7 | 0.0532 | |||
| Note Receivable | 25,000 | Average | 0.0545 | |||
| Plant and Equipment | 350,000 | |||||
| Cost of Goods Sold | 160,000 | |||||
| Depreciation Expense | 10,000 | |||||
| Other Expenses | 90,000 | |||||
| Dividends | 80,000 | |||||
| Total Debits | 960,000 | |||||
| Accumulated Depreciation | 10,000 | |||||
| Accounts Payable | 60,000 | |||||
| Bonds Payable | 180,000 | |||||
| Mortgage Payable | 230,000 | |||||
| Common Stock | 150,000 | |||||
| Sales | 330,000 | |||||
| Total Credits | 960,000 | |||||
Sheet2
Sheet3
Workbook4.xlsx
Sheet1
| Account | Honduras | Rate | U.S. |
| Limpiras | Dollars | ||
| Cash | 25,000 | ||
| Accounts Receivable | 60,000 | ||
| Inventory | 160,000 | ||
| Note Receivable | 25,000 | ||
| Plant and Equipment | 350,000 | ||
| Cost of Goods Sold | 160,000 | ||
| Depreciation Expense | 10,000 | ||
| Other Expenses | 90,000 | ||
| Dividends | 80,000 | ||
| Total Debits | 960,000 | ||
| Accumulated Depreciation | 10,000 | ||
| Accounts Payable | 60,000 | ||
| Bonds Payable | 180,000 | ||
| Mortgage Payable | 230,000 | ||
| Common Stock | 150,000 | ||
| Sales | 330,000 | ||
| Total Credits | 960,000 | ||
Sheet2
Sheet3
Workbook5.xlsx
Sheet1
| Exchange Rates | ||||||
| Account | Honduras | Translation | U.S. | |||
| Limpiras | Rate | Dollars | 1/2/X7 | 0.0553 | ||
| Cash | 25,000 | 4/1/X7 | 0.0550 | |||
| Accounts Receivable | 60,000 | 11/30/X7 | 0.0535 | |||
| Inventory | 160,000 | 12/31/X7 | 0.0532 | |||
| Note Receivable | 25,000 | Average | 0.0545 | |||
| Plant and Equipment | 350,000 | |||||
| Cost of Goods Sold | 160,000 | |||||
| Depreciation Expense | 10,000 | |||||
| Other Expenses | 90,000 | |||||
| Dividends | 80,000 | |||||
| Total Debits | 960,000 | |||||
| Accumulated Depreciation | 10,000 | |||||
| Accounts Payable | 60,000 | |||||
| Bonds Payable | 180,000 | |||||
| Mortgage Payable | 230,000 | |||||
| Common Stock | 150,000 | |||||
| Sales | 330,000 | |||||
| Total Credits | 960,000 | |||||
Sheet2
Sheet3
image19.emf
image20.emf
Workbook6.xlsx
Sheet1
| Account | Honduras | Rate | U.S. |
| Limpiras | Dollars | ||
| Cash | 25,000 | 0.0532 | 1,330 |
| Accounts Receivable | 60,000 | 0.0532 | 3,192 |
| Inventory | 160,000 | 0.0532 | 8,512 |
| Note Receivable | 25,000 | 0.0532 | 1,330 |
| Plant and Equipment | 350,000 | 0.0532 | 18,620 |
| Cost of Goods Sold | 160,000 | 0.0545 | 8,720 |
| Depreciation Expense | 10,000 | 0.0545 | 545 |
| Other Expenses | 90,000 | 0.0545 | 4,905 |
| Dividends | 80,000 | 0.0535 | 4,280 |
| Total Debits | 960,000 | 51,434 | |
| Acc. OCI— Translation Adjustment | 382 | ||
| Adjusted Total Debits | 51,816 | ||
| Accumulated Depreciation | 10,000 | 0.0532 | 532 |
| Accounts Payable | 60,000 | 0.0532 | 3,192 |
| Bonds Payable | 180,000 | 0.0532 | 9,576 |
| Mortgage Payable | 230,000 | 0.0532 | 12,236 |
| Common Stock | 150,000 | 0.0553 | 8,295 |
| Sales | 330,000 | 0.0545 | 17,985 |
| Total Credits | 960,000 | 51,816 | |
Sheet2
Sheet3
Workbook7.xlsx
Sheet1
| Account | Honduras | Translation | U.S. | Exchange Rates | ||
| Limpiras | Rate | Dollars | 1/2/X7 | 0.0553 | ||
| Cash | 25,000 | 4/1/X7 | 0.0550 | |||
| Accounts Receivable | 60,000 | 11/30/X7 | 0.0535 | |||
| Inventory | 160,000 | 12/31/X7 | 0.0532 | |||
| Note Receivable | 25,000 | Average | 0.0545 | |||
| Plant and Equipment | 350,000 | |||||
| Cost of Goods Sold | 160,000 | |||||
| Depreciation Expense | 10,000 | |||||
| Other Expenses | 90,000 | |||||
| Dividends | 80,000 | |||||
| Total Debits | 960,000 | |||||
| Accumulated Depreciation | 10,000 | |||||
| Accounts Payable | 60,000 | |||||
| Bonds Payable | 180,000 | |||||
| Mortgage Payable | 230,000 | |||||
| Common Stock | 150,000 | |||||
| Sales | 330,000 | |||||
| Total Credits | 960,000 | |||||
Sheet2
Sheet3
image21.emf
image22.emf
Sheet1
| Account | Euros | Rate | U.S. |
| Dollars | |||
| Cash | 25,000 | ||
| Accounts Receivable | 60,000 | ||
| Inventory | 160,000 | ||
| Note Receivable | 25,000 | ||
| Plant and Equipment | 350,000 | ||
| Cost of Goods Sold | 160,000 | ||
| Depreciation Expense | 10,000 | ||
| Other Expenses | 90,000 | ||
| Dividends | 80,000 | ||
| Total Debits | 960,000 | ||
| Accumulated Depreciation | 10,000 | ||
| Accounts Payable | 60,000 | ||
| Bonds Payable | 180,000 | ||
| Mortgage Payable | 230,000 | ||
| Common Stock | 150,000 | ||
| Sales | 330,000 | ||
| Total Credits | 960,000 | ||
Sheet2
Sheet3
Sheet1
| Exchange Rates | ||||||
| Account | Honduras | Translation | U.S. | |||
| Limpiras | Rate | Dollars | 1/2/X7 | 1.0300 | ||
| Cash | 25,000 | 4/1/X7 | 1.0700 | |||
| Accounts Receivable | 60,000 | 11/30/X7 | 1.0500 | |||
| Inventory | 160,000 | 12/31/X7 | 1.0900 | |||
| Note Receivable | 25,000 | Average | 1.0800 | |||
| Plant and Equipment | 350,000 | |||||
| Cost of Goods Sold | 160,000 | |||||
| Depreciation Expense | 10,000 | |||||
| Other Expenses | 90,000 | |||||
| Dividends | 80,000 | |||||
| Total Debits | 960,000 | |||||
| Accumulated Depreciation | 10,000 | |||||
| Accounts Payable | 60,000 | |||||
| Bonds Payable | 180,000 | |||||
| Mortgage Payable | 230,000 | |||||
| Common Stock | 150,000 | |||||
| Sales | 330,000 | |||||
| Total Credits | 960,000 | |||||
Sheet2
Sheet3
image23.emf
image24.emf
Sheet1
| Account | Euros | Rate | U.S. |
| Dollars | |||
| Cash | 25,000 | ||
| Accounts Receivable | 60,000 | ||
| Inventory | 160,000 | ||
| Note Receivable | 25,000 | ||
| Plant and Equipment | 350,000 | ||
| Cost of Goods Sold | 160,000 | ||
| Depreciation Expense | 10,000 | ||
| Other Expenses | 90,000 | ||
| Dividends | 80,000 | ||
| Total Debits | 960,000 | ||
| Accumulated Depreciation | 10,000 | ||
| Accounts Payable | 60,000 | ||
| Bonds Payable | 180,000 | ||
| Mortgage Payable | 230,000 | ||
| Common Stock | 150,000 | ||
| Sales | 330,000 | ||
| Total Credits | 960,000 | ||
Sheet2
Sheet3
Sheet1
| Exchange Rates | ||||||
| Account | Honduras | Translation | U.S. | |||
| Limpiras | Rate | Dollars | 1/2/X7 | 1.0300 | ||
| Cash | 25,000 | 4/1/X7 | 1.0700 | |||
| Accounts Receivable | 60,000 | 11/30/X7 | 1.0500 | |||
| Inventory | 160,000 | 12/31/X7 | 1.0900 | |||
| Note Receivable | 25,000 | Average | 1.0800 | |||
| Plant and Equipment | 350,000 | |||||
| Cost of Goods Sold | 160,000 | |||||
| Depreciation Expense | 10,000 | |||||
| Other Expenses | 90,000 | |||||
| Dividends | 80,000 | |||||
| Total Debits | 960,000 | |||||
| Accumulated Depreciation | 10,000 | |||||
| Accounts Payable | 60,000 | |||||
| Bonds Payable | 180,000 | |||||
| Mortgage Payable | 230,000 | |||||
| Common Stock | 150,000 | |||||
| Sales | 330,000 | |||||
| Total Credits | 960,000 | |||||
Sheet2
Sheet3
image25.emf
image26.emf
Sheet1
| Account | Rate | U.S. | |
| Euros | Dollars | ||
| Cash | 25,000 | 1.0900 | 27,250 |
| Accounts Receivable | 60,000 | 1.0900 | 65,400 |
| Inventory | 160,000 | 1.0900 | 174,400 |
| Note Receivable | 25,000 | 1.0900 | 27,250 |
| Plant and Equipment | 350,000 | 1.0900 | 381,500 |
| Cost of Goods Sold | 160,000 | 1.0800 | 172,800 |
| Depreciation Expense | 10,000 | 1.0800 | 10,800 |
| Other Expenses | 90,000 | 1.0800 | 97,200 |
| Dividends | 80,000 | 1.0500 | 84,000 |
| Total Debits | 960,000 | 1,040,600 | |
| Acc. OCI— Translation Adjustment | -6,500 | ||
| Adjusted Total Debits | 1,034,100 | ||
| Accumulated Depreciation | 10,000 | 1.0900 | 10,900 |
| Accounts Payable | 60,000 | 1.0900 | 65,400 |
| Bonds Payable | 180,000 | 1.0900 | 196,200 |
| Mortgage Payable | 230,000 | 1.0900 | 250,700 |
| Common Stock | 150,000 | 1.0300 | 154,500 |
| Sales | 330,000 | 1.0800 | 356,400 |
| Total Credits | 960,000 | 1,034,100 | |
Sheet2
Sheet3
Sheet1
| Account | Honduras | Translation | U.S. | Exchange Rates | ||
| Limpiras | Rate | Dollars | 1/2/X7 | 1.0300 | ||
| Cash | 25,000 | 4/1/X7 | 1.0700 | |||
| Accounts Receivable | 60,000 | 11/30/X7 | 1.0500 | |||
| Inventory | 160,000 | 12/31/X7 | 1.0900 | |||
| Note Receivable | 25,000 | Average | 1.0800 | |||
| Plant and Equipment | 350,000 | |||||
| Cost of Goods Sold | 160,000 | |||||
| Depreciation Expense | 10,000 | |||||
| Other Expenses | 90,000 | |||||
| Dividends | 80,000 | |||||
| Total Debits | 960,000 | |||||
| Accumulated Depreciation | 10,000 | |||||
| Accounts Payable | 60,000 | |||||
| Bonds Payable | 180,000 | |||||
| Mortgage Payable | 230,000 | |||||
| Common Stock | 150,000 | |||||
| Sales | 330,000 | |||||
| Total Credits | 960,000 | |||||
Sheet2
Sheet3
image27.emf
Sheet1
| Account | Honduras | Translation | U.S. | Exchange Rates | ||
| Limpiras | Rate | Dollars | 1/2/X7 | 0.7300 | ||
| Cash | 25,000 | 4/1/X7 | 0.8500 | |||
| Accounts Receivable | 60,000 | 11/30/X7 | 0.7700 | |||
| Inventory | 160,000 | 12/31/X7 | 0.8000 | |||
| Note Receivable | 25,000 | Average | 0.7500 | |||
| Plant and Equipment | 350,000 | |||||
| Cost of Goods Sold | 160,000 | |||||
| Depreciation Expense | 10,000 | |||||
| Other Expenses | 90,000 | |||||
| Dividends | 80,000 | |||||
| Total Debits | 960,000 | |||||
| Accumulated Depreciation | 10,000 | |||||
| Accounts Payable | 60,000 | |||||
| Bonds Payable | 180,000 | |||||
| Mortgage Payable | 230,000 | |||||
| Common Stock | 150,000 | |||||
| Sales | 330,000 | |||||
| Total Credits | 960,000 | |||||
Sheet2
Sheet3
image28.jpeg
image29.GIF
image30.png
image31.png
image32.emf
Workbook8.xlsx
Sheet1
| Exchange Rates | ||||||
| Account | Honduras | Translation | U.S. | |||
| Limpiras | Rate | Dollars | 1/2/X7 | 0.0553 | ||
| Cash | 25,000 | 4/1/X7 | 0.0550 | |||
| Accounts Receivable | 60,000 | 11/30/X7 | 0.0535 | |||
| Inventory | 160,000 | 12/31/X7 | 0.0532 | |||
| Note Receivable | 25,000 | Average | 0.0545 | |||
| Plant and Equipment | 350,000 | |||||
| Cost of Goods Sold | 160,000 | |||||
| Depreciation Expense | 10,000 | |||||
| Other Expenses | 90,000 | |||||
| Dividends | 80,000 | |||||
| Total Debits | 960,000 | |||||
| Accumulated Depreciation | 10,000 | |||||
| Accounts Payable | 60,000 | |||||
| Bonds Payable | 180,000 | |||||
| Mortgage Payable | 230,000 | |||||
| Common Stock | 150,000 | |||||
| Sales | 330,000 | |||||
| Total Credits | 960,000 | |||||
Sheet2
Sheet3
Workbook9.xlsx
Sheet1
| Account | Honduras | Rate | U.S. |
| Limpiras | Dollars | ||
| Cash | 25,000 | ||
| Accounts Receivable | 60,000 | ||
| Inventory | 160,000 | ||
| Note Receivable | 25,000 | ||
| Plant and Equipment | 350,000 | ||
| Cost of Goods Sold | 160,000 | ||
| Depreciation Expense | 10,000 | ||
| Other Expenses | 90,000 | ||
| Dividends | 80,000 | ||
| Total Debits | 960,000 | ||
| Accumulated Depreciation | 10,000 | ||
| Accounts Payable | 60,000 | ||
| Bonds Payable | 180,000 | ||
| Mortgage Payable | 230,000 | ||
| Common Stock | 150,000 | ||
| Sales | 330,000 | ||
| Total Credits | 960,000 | ||
Sheet2
Sheet3
image33.emf
Workbook10.xlsx
Sheet1
| Account | Honduras | Translation | U.S. | Exchange Rates | ||
| Limpiras | Rate | Dollars | 1/2/X7 | 0.0553 | ||
| Cash | 25,000 | 4/1/X7 | 0.0550 | |||
| Accounts Receivable | 60,000 | 11/30/X7 | 0.0535 | |||
| Inventory | 160,000 | 12/31/X7 | 0.0532 | |||
| Note Receivable | 25,000 | Average | 0.0545 | |||
| Plant and Equipment | 350,000 | |||||
| Cost of Goods Sold | 160,000 | |||||
| Depreciation Expense | 10,000 | |||||
| Other Expenses | 90,000 | |||||
| Dividends | 80,000 | |||||
| Total Debits | 960,000 | |||||
| Accumulated Depreciation | 10,000 | |||||
| Accounts Payable | 60,000 | |||||
| Bonds Payable | 180,000 | |||||
| Mortgage Payable | 230,000 | |||||
| Common Stock | 150,000 | |||||
| Sales | 330,000 | |||||
| Total Credits | 960,000 | |||||
Sheet2
| Rate | Honduras | Rate | U.S. |
| Limpiras | Dollars | ||
| Beginning Inventory | 0) | 0.0553 | 0) |
| Add: Purchases | 320,000) | 0.0545 | 17,440) |
| Goods Available for Sale | 320,000) | 17,440) | |
| Less: Ending Inventory | (160,000) | 0.0535 | (8,560) |
| Cost of Goods Sold | 160,000) | (a) | 8,880) |
Sheet3
Workbook11.xlsx
Sheet1
| Exchange Rates | ||||||
| Account | Honduras | Translation | U.S. | |||
| Limpiras | Rate | Dollars | 1/2/X7 | 0.0553 | ||
| Cash | 25,000 | 4/1/X7 | 0.0550 | |||
| Accounts Receivable | 60,000 | 11/30/X7 | 0.0535 | |||
| Inventory | 160,000 | 12/31/X7 | 0.0532 | |||
| Note Receivable | 25,000 | Average | 0.0545 | |||
| Plant and Equipment | 350,000 | |||||
| Cost of Goods Sold | 160,000 | |||||
| Depreciation Expense | 10,000 | |||||
| Other Expenses | 90,000 | |||||
| Dividends | 80,000 | |||||
| Total Debits | 960,000 | |||||
| Accumulated Depreciation | 10,000 | |||||
| Accounts Payable | 60,000 | |||||
| Bonds Payable | 180,000 | |||||
| Mortgage Payable | 230,000 | |||||
| Common Stock | 150,000 | |||||
| Sales | 330,000 | |||||
| Total Credits | 960,000 | |||||
Sheet2
Sheet3
image34.emf
Workbook12.xlsx
Sheet1
| Account | Honduras | Rate | U.S. |
| Limpiras | Dollars | ||
| Cash | 25,000 | 0.0532 | 1,330 |
| Accounts Receivable | 60,000 | 0.0532 | 3,192 |
| Inventory | 160,000 | 0.0535 | 8,560 |
| Note Receivable | 25,000 | 0.0532 | 1,330 |
| Plant and Equipment | 350,000 | 0.0550 | 19,250 |
| Cost of Goods Sold | 160,000 | (a) | 8,880 |
| Depreciation Expense | 10,000 | 0.0550 | 550 |
| Other Expenses | 90,000 | 0.0545 | 4,905 |
| Dividends | 80,000 | 0.0535 | 4,280 |
| Total Debits | 960,000 | 52,277 | |
| Accumulated Depreciation | 10,000 | 0.0550 | 550 |
| Accounts Payable | 60,000 | 0.0532 | 3,192 |
| Bonds Payable | 180,000 | 0.0532 | 9,576 |
| Mortgage Payable | 230,000 | 0.0532 | 12,236 |
| Common Stock | 150,000 | 0.0553 | 8,295 |
| Sales | 330,000 | 0.0545 | 17,985 |
| Total Credits | 960,000 | 51,834 | |
| Remeasurement Gain | 443 | ||
| Adjusted Total Credits | 52,277 | ||
Sheet2
Sheet3
Workbook13.xlsx
Sheet1
| Exchange Rates | ||||||
| Account | Honduras | Translation | U.S. | |||
| Limpiras | Rate | Dollars | 1/2/X7 | 0.0553 | ||
| Cash | 25,000 | 4/1/X7 | 0.0550 | |||
| Accounts Receivable | 60,000 | 11/30/X7 | 0.0535 | |||
| Inventory | 160,000 | 12/31/X7 | 0.0532 | |||
| Note Receivable | 25,000 | Average | 0.0545 | |||
| Plant and Equipment | 350,000 | |||||
| Cost of Goods Sold | 160,000 | |||||
| Depreciation Expense | 10,000 | |||||
| Other Expenses | 90,000 | |||||
| Dividends | 80,000 | |||||
| Total Debits | 960,000 | |||||
| Accumulated Depreciation | 10,000 | |||||
| Accounts Payable | 60,000 | |||||
| Bonds Payable | 180,000 | |||||
| Mortgage Payable | 230,000 | |||||
| Common Stock | 150,000 | |||||
| Sales | 330,000 | |||||
| Total Credits | 960,000 | |||||
Sheet2
Sheet3
image35.jpeg
image36.jpeg
image37.jpeg
image38.emf
Workbook14.xlsx
Sheet1
| Account | Honduras | Translation | U.S. | Exchange Rates | ||
| Limpiras | Rate | Dollars | 1/2/X7 | 0.7300 | ||
| Cash | 25,000 | 4/1/X7 | 0.7400 | |||
| Accounts Receivable | 60,000 | 11/30/X7 | 0.7700 | |||
| Inventory | 160,000 | 12/31/X7 | 0.8000 | |||
| Note Receivable | 25,000 | Average | 0.7500 | |||
| Plant and Equipment | 350,000 | |||||
| Cost of Goods Sold | 160,000 | |||||
| Depreciation Expense | 10,000 | |||||
| Other Expenses | 90,000 | |||||
| Dividends | 80,000 | |||||
| Total Debits | 960,000 | |||||
| Accumulated Depreciation | 10,000 | |||||
| Accounts Payable | 60,000 | |||||
| Bonds Payable | 180,000 | |||||
| Mortgage Payable | 230,000 | |||||
| Common Stock | 150,000 | |||||
| Sales | 330,000 | |||||
| Total Credits | 960,000 | |||||
