Halon France, the French subsidiary of a U.S. company, Halon, Inc., has the following balance sheet:

a. At the current spot rate of $0.21/FF, calculate Halon France’s accounting exposure under the currentoncurrent, monetaryonmonetary, temporal, and current rate methods.

b. Suppose the French franc depreciates to $0.17. Produce balance sheets for Halon France at the new exchange rate under each of the four alternative translation methods.

c. Calculate the translation gains or losses associated with the FF depreciation for each of the four methods. Relate these gains and losses to the exposure calculations performed in part a combined with the exchange rate change. Where would these translation gains or losses show up in the balance sheets prepared for part b?

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Assets (FF thousands) Cash, marketable securities Accounts receivable Inventory Net fixed assets Liabilities (FF thousands) 7,000 Accounts payable 18,000 Short-term debt 31,000 Long-term debt 63,000 Equity FF119,000 14,000 8,000 45,000 52,000 FF119,000