Shinra Power Company operates in Canada and operates an exporting business in the country of Midgar....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Shinra Power Company operates in Canada and operates an exporting business in the country of Midgar. The country of Midgar primarily uses the "GIL" currency. The Midgar subsidiary, which was acquired on January 1, 1986, provided the following financial statements in GIL to the Canadian parent company. SHINRA POWER COMPANY, Midgar Branch Statement of Comprehensive Income Year Ended December 31, 2020 Sales Cost of goods sold Depreciation expense Other expenses GIL 2,300,000 (1,200,000) (300,000) (300,000) Comprehensive income GIL500,000 SHINRA POWER COMPANY, Midgar Branch Statement of Changes in Equity-Partial-Retained Earnings section Year Ended December 31, 2020 Retained earnings-January 1 GIL 850,000 500,000 Comprehensive income for the y с уear Less: Dividends declared and paid, December 31 (200,000) GILL,150,000 Retained earnings-December 31 SHINRA POWER COMPANY, Midgar Branch Statement of Financial Position December 31, 2020 Assets Cash and receivables 2020 2019 Merchandise inventory Property, plant, and equipment Total GIL 1,150,000 GIL 520,000 450,000 3.450.000 GIL 5,050,000 GIL 4,650,000 380,000 3,750.000 Current liabilities Long-term notes due December 31, 2024 Capital stock Retained earnings Total GIL700,000 GIL600,000 1,200,000 2,000,000 1,150,000 GIL5,050,000 GIL4,650,000 1,200,000 2,000,000 850,000 Shinra Power Company was incorporated on January 1, 1984, at which time an amount of property, plant, and equipment with a present (December 31, 2020) net book value of GIL3,000,000 was purchased. Additional equipment was purchased December 31, 2019 (20% of depreciation expense relates to this new equipment). The long-term notes were issued, to replace financing provided by the parent, on January 1, 2019. Direct exchange rates for the GIL currency are: January 1, 1984 January 1, 1986 January 1, 2019 Average for quarter 4, 2019 December 31, 2019 / January 1, 2020 December 31, 2020 GIL 1 = $1.92 CAD GIL 1 = 1.781 CAD GIL 1 = 1.60 CAD GIL 1 = 1.56 CAD GIL 1 = 1.54 CAD GIL 1 = 1.47 CAD Average for 2020 Average for quarter 4, 2020 GIL 1 = 1.51 CAD GIL 1 = 1.50 CAD The beginning inventory of GIL380,000 was acquired during the last quarter of 2019 and the ending inventory was acquired during the last quarter of 2020. Sales and purchases were made, and other expenses were incurred, evenly throughout the year. Required: Parts A - C: Assume that the functional currency of Shinra Power Company, Midgar Branch is the Canadian dollar. Calculate the following amounts in Canadian dollars as they would appear on the translated statement of A) comprehensive income for the year ended December 31, 2020 I) II) III) Cost of Goods Sold (3.5 Points) Depreciation Expense (2.5 Point) Foreign Exchange gain or loss (6 Points) B) Prepare the translated statement of comprehensive income in Canadian dollars. (Note, many of your answers will be consistent with part A, no need to show this work again) (2.5 Points) C) Prepare the translated statement of financial position in Canadian dollars. (Calculate all numbers, no plugs). Assume that the January 1, 2020 retained earnings balance of the Midgar Branch of the Shinra Power Company was correctly translated to Canadian dollars of $1,783,774. (7 Points) Part D: Assume that the functional currency of Shinra Power Company, Midgar Branch is the GIL and the D) financial statements are being translated to the Canadian dollar presentation currency. What would be the total change in the cumulative translation account for the year ended December 31, 2020 (the other comprehensive income/loss in 2020)? (3.5 Points) Shinra Power Company operates in Canada and operates an exporting business in the country of Midgar. The country of Midgar primarily uses the "GIL" currency. The Midgar subsidiary, which was acquired on January 1, 1986, provided the following financial statements in GIL to the Canadian parent company. SHINRA POWER COMPANY, Midgar Branch Statement of Comprehensive Income Year Ended December 31, 2020 Sales Cost of goods sold Depreciation expense Other expenses GIL 2,300,000 (1,200,000) (300,000) (300,000) Comprehensive income GIL500,000 SHINRA POWER COMPANY, Midgar Branch Statement of Changes in Equity-Partial-Retained Earnings section Year Ended December 31, 2020 Retained earnings-January 1 GIL 850,000 500,000 Comprehensive income for the y с уear Less: Dividends declared and paid, December 31 (200,000) GILL,150,000 Retained earnings-December 31 SHINRA POWER COMPANY, Midgar Branch Statement of Financial Position December 31, 2020 Assets Cash and receivables 2020 2019 Merchandise inventory Property, plant, and equipment Total GIL 1,150,000 GIL 520,000 450,000 3.450.000 GIL 5,050,000 GIL 4,650,000 380,000 3,750.000 Current liabilities Long-term notes due December 31, 2024 Capital stock Retained earnings Total GIL700,000 GIL600,000 1,200,000 2,000,000 1,150,000 GIL5,050,000 GIL4,650,000 1,200,000 2,000,000 850,000 Shinra Power Company was incorporated on January 1, 1984, at which time an amount of property, plant, and equipment with a present (December 31, 2020) net book value of GIL3,000,000 was purchased. Additional equipment was purchased December 31, 2019 (20% of depreciation expense relates to this new equipment). The long-term notes were issued, to replace financing provided by the parent, on January 1, 2019. Direct exchange rates for the GIL currency are: January 1, 1984 January 1, 1986 January 1, 2019 Average for quarter 4, 2019 December 31, 2019 / January 1, 2020 December 31, 2020 GIL 1 = $1.92 CAD GIL 1 = 1.781 CAD GIL 1 = 1.60 CAD GIL 1 = 1.56 CAD GIL 1 = 1.54 CAD GIL 1 = 1.47 CAD Average for 2020 Average for quarter 4, 2020 GIL 1 = 1.51 CAD GIL 1 = 1.50 CAD The beginning inventory of GIL380,000 was acquired during the last quarter of 2019 and the ending inventory was acquired during the last quarter of 2020. Sales and purchases were made, and other expenses were incurred, evenly throughout the year. Required: Parts A - C: Assume that the functional currency of Shinra Power Company, Midgar Branch is the Canadian dollar. Calculate the following amounts in Canadian dollars as they would appear on the translated statement of A) comprehensive income for the year ended December 31, 2020 I) II) III) Cost of Goods Sold (3.5 Points) Depreciation Expense (2.5 Point) Foreign Exchange gain or loss (6 Points) B) Prepare the translated statement of comprehensive income in Canadian dollars. (Note, many of your answers will be consistent with part A, no need to show this work again) (2.5 Points) C) Prepare the translated statement of financial position in Canadian dollars. (Calculate all numbers, no plugs). Assume that the January 1, 2020 retained earnings balance of the Midgar Branch of the Shinra Power Company was correctly translated to Canadian dollars of $1,783,774. (7 Points) Part D: Assume that the functional currency of Shinra Power Company, Midgar Branch is the GIL and the D) financial statements are being translated to the Canadian dollar presentation currency. What would be the total change in the cumulative translation account for the year ended December 31, 2020 (the other comprehensive income/loss in 2020)? (3.5 Points)
Expert Answer:
Related Book For
Principles of Taxation for Business and Investment Planning 2016 Edition
ISBN: 9781259549250
19th edition
Authors: Sally Jones, Shelley Rhoades Catanach
Posted Date:
Students also viewed these accounting questions
-
Zara Uses Operations Research to Reengineer Its Global Distribution Process By Felipe Caro Jeremene Gallien 1)What are the business practice examples that motivate the research? (2) What are the...
-
A simple graph is any graph which does not form any loop where the starting vertex is the same with the end vertex. It also does not allow more than one edge between any two vertices 2. How many...
-
Environmental Inc. operates in Canada and the United States. Its basic business is high-temperature treatment services for contaminated soil. In its 2020 financial statements, the company had a loss...
-
Give the approximate temperature at which creep deformation becomes an important consideration for each of the following metals: nickel, copper, iron, tungsten, lead, and aluminum.
-
A random-sequence polyribonucleotide produced by polynucleotide phosphorylase, with CDP and ADP in a 5:1 molar ratio stimulated the incorporation of proline, histidine, threonine, glutamine,...
-
Jeff Immelt became CEO and chairman of GE on September 7, 2001. Analyze GE's external environment since 2001 using PESTEL and discuss the effects these changes have had on GE. Is Immelt responsible...
-
Suppose that in the double stochastic Simplico gold mine example the real probability of an up move in gold is 6 and the real probability of an up move in the short rate is .7. Suppose also that gold...
-
Clean Skin Company sells bottles of three face-wash products: Daily Wash, Mud Mask, and Face Cleanser. The company has annual fixed costs of $300,000. Last year, the company sold 7,500 bottles of its...
-
Create the general journal entries, post to the T - Accounts, and record all applicable entries to the job sheets.a . Raw materials of $ 5 0 , 0 0 0 . 0 0 were purchased with cashb. Factory labor...
-
The results below are based on data collected as part of a student project for an introductory statistics class at UF. If there is more than one group/treatment, the first group mentioned is group 1....
-
Part a: CO adsorption on a Ni catalyst follows the Langmuir adsorption isotherm. Given the following data determine the Langmuir adsorption constant for CO chemisorption on a Ni catalyst at 373K....
-
Many executives own shares in the companies they manage and are also in high tax brackets. When faced with the choice between declaring dividends and repurchasing shares, managers may opt to...
-
Assume you have just been hired as a business manager of Pizza Stop, a pizza restaurant located adjacent to campus. The company's EBIT was $5,000 during 2021, and since the college's enrollment is...
-
A pump station has an initial cost of $47,000. Other costs are: 1. Pumps: $9000 2. Control panel: $4000 3. Annual maintenance: $550 4. Salvage value: $10,000 5. Discount rate: 8% Pump life is 10...
-
Assuming that yesterday's closing price of the S & P 500 was 1000, the daily logarithmic return volatility estimated using the GARCH (1,1) model was 1.2 per cent. The parameters of GARCH model are =...
-
Crane Company acquired Ranger Company for $44496000 cash on August 1, 2026. The fair value of Ranger Company's identifiable tangible and intangible net assets was $38352000. Crane will amortize any...
-
10 8 2. Use your calculator to graph the equations f(x) = x + 3 and f(x) = x, complete the table below, and find the intersection points. X y=1/3x+3 -3 0 3 y=x^2 -3 3210123 -2 3. Find the x and y...
-
In the simple quantity theory of money, what will lead to an increase in aggregate demand? In monetarism, what will lead to an increase in aggregate demand?
-
Visit the website for the Tax Foundation (www.taxfoundation.org). Select the link About Us to read the organizations mission statement. Select the link Tax Topics to research the following: a. What...
-
Peet Company provides free on-site day care for its employees with preschool children. Determine the pretax value of the care for each of the following employees: a. Mrs. U, who has a 33 percent...
-
On January 12, 2013, Mr. and Mrs. Nixon moved out of their old residence (where they had lived for 22 years) and into a new residence purchased nine days earlier on January 3. They nally sold their...
-
The treatment of outflows on account of dividend and interest is highly debatable as to their activity classification. Give a serious thought to the issue and express your opinion about the best...
-
Consider the same setting as Problem 18, but suppose instead 80% of the shareholders redeem their shares, and no warrants are exercised. Data from problem 18 a. What is the amount of cash per share...
-
Reliance Industries Ltd. is the biggest private sector company in India. The following fact sheet about the company and its peer group, as extracted from Capitaline Plus database is reproduced in the...
Study smarter with the SolutionInn App