Loring Company owns a subsidiary in Switzerland. The subsidiary was acquired on January 1,2013. Subsidiary trial balances
Question:
Additional information:
1. Included in operating expenses is depreciation expense of CHF5,000.
2. Plant and equipment of CHF30,000 was purchased for cash during 2013, when the exchange rate was $0.50. Depreciation of CHF2,000 was taken on this purchase during 2013.
3. The ending inventory was purchased during the month of December.
4. Revenues, purchases, and operating expenses other than depreciation occurred evenly during the year.
5. Dividends were declared and paid on December 31,2013.
6. Exchange rates for 2013 were as follows ($/CHF):
January 1, 2013$0.49
Average for 2013 0.52
Average for December, 2013 0.54
December 31, 2013 0.55
Required
a. Assume the functional currency of the subsidiary is the dollar. Prepare remeasured financial statements for the subsidiary, including a schedule showing the computation of the remeasurement gain or loss for 2013.
b. Repeat the requirements of part a, assuming the functional currency of the subsidiary is the Swiss franc.
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...
Step by Step Answer:
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III