3) A U.S parent acquired all the stock of German subsidiary at January 1,2021. The subsidiary's...

  

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3) A U.S parent acquired all the stock of German subsidiary at January 1,2021. The subsidiary's January 1 and December 31, 2021, trial balances are as follows, in euros: Translated Exchange Balance 2021 12/31/2021 Dr(Cr) Cash Receivables Inventories at FIFO cost Planet and eq Liabilities Capital stock Retain ear Beg Dividends January 1, January 1,2021 Average for 2021 Rate when Dr(Cr) Dividends Declared e 250,000 600,000 Sales revenue Cost of goods sold Depreciation expense Out of pocket expenses 1,700,000 (1,500,000) (450,000) (700,000) $ 1.45 1.35 1.32 December 31, 2021 DR(Cr) 1.30 € 325,000 750,000 EO Sales, purchases, and recurring out of pocket expenses occurred evenly throughout the year. Exchange rates (S/E) are: 1,550,000 (1,375,000) (450,000) (700,000) *100,000 (1,950,000) 1,100,000 150,000 500,000 EO Dec 31, 2021 1. Fill out the columns of exchange rates applied and translated balances at dec. 31, 2021 assuming the subsidiary functional currency is the euro. Rate 2. Calculate the translation gain or loss for 2021 using the exposed position method. 3. Assume that the subsidiary's functional currency is the US dollar, calculate the subsidiary ending inventory and it's cost of goods sold in the US dollar for the year. The subsidiary uses FIFO and its beginning inventory consists of e600,000 acquired when the exchange rate was $1.45(at date of acquisition). Purchases and sales of inventory occurred evenly throughout the year. The subsidiary's ending inventory consists of E250,000 purchased when the exenange rate $1.34 and E500,000 2. Calculate the translation gain or loss for 2021 using the exposed position method. 3. Assume that the subsidiary's functional currency is the US dollar, calculate the subsidiary ending inventory and it's cost of goods sold in the U.S dollar for the year. The subsidiary uses FIFO and its beginning inventory consists of e600,000 acquired when the exchange rate was $1.45(at date of acquisition). Purchases and sales of inventory occurred evenly throughout the year. The subsidiary's ending inventory consists of E250,000 purchased when the exchange rate $1.34 and E500,000 purchased when the exchanged rate 1.32 3) A U.S parent acquired all the stock of German subsidiary at January 1,2021. The subsidiary's January 1 and December 31, 2021, trial balances are as follows, in euros: Translated Exchange Balance 2021 12/31/2021 Dr(Cr) Cash Receivables Inventories at FIFO cost Planet and eq Liabilities Capital stock Retain ear Beg Dividends January 1, January 1,2021 Average for 2021 Rate when Dr(Cr) Dividends Declared e 250,000 600,000 Sales revenue Cost of goods sold Depreciation expense Out of pocket expenses 1,700,000 (1,500,000) (450,000) (700,000) $ 1.45 1.35 1.32 December 31, 2021 DR(Cr) 1.30 € 325,000 750,000 EO Sales, purchases, and recurring out of pocket expenses occurred evenly throughout the year. Exchange rates (S/E) are: 1,550,000 (1,375,000) (450,000) (700,000) *100,000 (1,950,000) 1,100,000 150,000 500,000 EO Dec 31, 2021 1. Fill out the columns of exchange rates applied and translated balances at dec. 31, 2021 assuming the subsidiary functional currency is the euro. Rate 2. Calculate the translation gain or loss for 2021 using the exposed position method. 3. Assume that the subsidiary's functional currency is the US dollar, calculate the subsidiary ending inventory and it's cost of goods sold in the US dollar for the year. The subsidiary uses FIFO and its beginning inventory consists of e600,000 acquired when the exchange rate was $1.45(at date of acquisition). Purchases and sales of inventory occurred evenly throughout the year. The subsidiary's ending inventory consists of E250,000 purchased when the exenange rate $1.34 and E500,000 2. Calculate the translation gain or loss for 2021 using the exposed position method. 3. Assume that the subsidiary's functional currency is the US dollar, calculate the subsidiary ending inventory and it's cost of goods sold in the U.S dollar for the year. The subsidiary uses FIFO and its beginning inventory consists of e600,000 acquired when the exchange rate was $1.45(at date of acquisition). Purchases and sales of inventory occurred evenly throughout the year. The subsidiary's ending inventory consists of E250,000 purchased when the exchange rate $1.34 and E500,000 purchased when the exchanged rate 1.32

Answer rating: 100% (QA)

Requirement 1 If the reporting currency of the foreign subsidiary is the functional currency then th... View the full answer