Watson Company has a subsidiary in the country of Alonza where the local currency unit is the
Question:
.png)
The subsidiary acquired the inventory on August 1, 2010, and the land and buildings in 2000. It issued the common stock in 1998. During 2011, the following transactions took place:
2011
Feb. 1 ..... Paid 5,000 KM on the note payable.
May 1 ..... Sold entire inventory for 15,000 KM on account.
June 1 ..... Sold land for 5,000 KM cash.
Aug. 1 ..... Collected all accounts receivable.
Sept. 1 ..... Signed long-term note to receive 6,000 KM cash.
Oct. 1 ..... Bought inventory for 12,000 KM cash.
Nov. 1 ..... Bought land for 4,000 KM on account.
Dec. 1 ..... Paid 3,000 KM cash dividend to parent.
Dec. 31 ..... Recorded depreciation for the entire year of 2,000 KM.
The exchange rates for 1 KM are as follows:
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 KM = $0.24
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 = 0.21
August 1, 2010 . . . . . . . . . . . . . . . . . . . . . . .1 = 0.31
December 31, 2010 . . . . . . . . . . . . . . . . . . . .1 = 0.32
February 1, 2011 . . . . . . . . . . . . . . . . . . . . . .1 = 0.33
May 1, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . 1 = 0.34
June 1, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . 1 = 0.35
August 1, 2011 . . . . . . . . . . . . . . . . . . . . . . .1 = 0.37
September 1, 2011 . . . . . . . . . . . . . . . . . . . . 1 = 0.38
October 1, 2011 . . . . . . . . . . . . . . . . . . . . . . 1 = 0.39
November 1, 2011 . . . . . . . . . . . . . . . . . . . . 1 = 0.40
December 1, 2011 . . . . . . . . . . . . . . . . . . . . 1 = 0.41
December 31, 2011 . . . . . . . . . . . . . . . . . . . 1 = 0.42
Average for 2011 . . . . . . . . . . . . . . . . . . . . .1 = 0.37
a. If this is a translation, what is the translation adjustment determined solely for 2011?
b. If this is a remeasurement, what is the remeasurement gain or loss determined solely for2011?
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
a Translation x only changes in net assets have an impact on the computation of the translation adju...View the full answer
Advanced Accounting
ISBN: 978-0077431808
10th edition
Authors: Joe Hoyle, Thomas Schaefer, Timothy Doupnik
