Lancer, Inc. (a U.S.-based company), establishes a subsidiary in Croatia on January 1, 2019. The following...
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Lancer, Inc. (a U.S.-based company), establishes a subsidiary in Croatia on January 1, 2019. The following account balances for the year ending December 31, 2020, are stated in kuna (K), the local currency: Sales K 300,000 Inventory (bought on 3/1/20) Equipment (bought on 1/1/19) 165,000 80,000 Rent expense 20,000 Dividends (declared on 10/1/20) 28,000 46,000 Notes receivable (to be collected in 2023) Accumulated depreciation-equipment 24,000 Salary payable 7,000 Depreciation expense 8,000 The following U.S.$ per kuna exchange rates are applicable: $0.29 0.30 January 1, 2019 Average for 2019 January 1, 2020 March 1, 2020 October 1, 2020 0.34 0.35 0.37 December 31, 2020 0.38 Average for 2020 0.36 Lancer is preparing account balances to produce consolidated financial statements. a. Assuming that the kuna is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? b. Assuming that the U.S. dollar is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? (For all requirements, round your answers to 2 decimal places.) Account Exchange Rate a. Sales Inventory Equipment Rent expense Dividends Notes receivable Accumulated depreciation equipment Salary payable Depreciation expense Sales Inventory Equipment Rent expense Dividends Notes receivable Accumulated depreciation-equipment Salary payable Depreciation expense b. Lancer, Inc. (a U.S.-based company), establishes a subsidiary in Croatia on January 1, 2019. The following account balances for the year ending December 31, 2020, are stated in kuna (K), the local currency: Sales K 300,000 Inventory (bought on 3/1/20) Equipment (bought on 1/1/19) 165,000 80,000 Rent expense 20,000 Dividends (declared on 10/1/20) 28,000 46,000 Notes receivable (to be collected in 2023) Accumulated depreciation-equipment 24,000 Salary payable 7,000 Depreciation expense 8,000 The following U.S.$ per kuna exchange rates are applicable: $0.29 0.30 January 1, 2019 Average for 2019 January 1, 2020 March 1, 2020 October 1, 2020 0.34 0.35 0.37 December 31, 2020 0.38 Average for 2020 0.36 Lancer is preparing account balances to produce consolidated financial statements. a. Assuming that the kuna is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? b. Assuming that the U.S. dollar is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? (For all requirements, round your answers to 2 decimal places.) Account Exchange Rate a. Sales Inventory Equipment Rent expense Dividends Notes receivable Accumulated depreciation equipment Salary payable Depreciation expense Sales Inventory Equipment Rent expense Dividends Notes receivable Accumulated depreciation-equipment Salary payable Depreciation expense b.
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Related Book For
Advanced Accounting
ISBN: 9781260247824
14th Edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
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