Under the current rate method, describe how the various balance sheet accounts are translated (including the equity accounts) and how this translation affects the computation of various ratios (such as debt to equity or the current ratio). In particular, discuss whether or not the ratios will change when computed in local currencies and compared to their calculations (after translation) using the parent's currency.
Answer to relevant QuestionsThe Shady Tree Company is preparing to announce their quarterly earnings numbers. The company expects to beat the analysts' forecast of earnings by at least 5 cents a share. In anticipation of the increase in stock value and ...Accounts are listed below for a foreign subsidiary that maintains its books in its local currency. The equity interest in the subsidiary was acquired in a purchase transaction. In the space provided, indicate the exchange ...A U.S. company owns an 80% interest in a company located on Mars. Martian currency is called the Martian Credit. During the year the parent company sold inventory that had cost $24,000 to the subsidiary on account for ...On January 1, 2008, a U.S. company purchased 100% of the outstanding stock of Ventana Grains, a company located in Latz City, New Zealand. Ventana Grains was organized on January 1, 1994. All the property, plant, and ...Use the information provided in Problem 13-9 for P Company and SFr Company.Required:A. Convert the accounts of the foreign subsidiary, assuming that the U.S. dollar is the functional currency of both companies. For this ...
Post your question