Amcrest France Sarl, located in Paris. France, is a financial subsidiary of Target Corporation, a U.S....

  

Transcribed Image Text:

Amcrest France Sarl, located in Paris. France, is a financial subsidiary of Target Corporation, a U.S. company. Amcrest's accounts are re- ported in euros. Assume that the following data relate to Amcrest's activities for 2020 (in millions). Net monetary liabilities, beginning of year. Net assets, beginning of year.. Transactions during 2020: €(15,000) 5,400 72,000 59,000 Sales.. Inventory purchases.. Depreciation and amortization Cost of sales... Cash operating expenses. Dividends declared and paid New long-term interest borrowings 1,000 61,000 9,500 100 300 Sales, inventory purchases, and cash operating expenses were reported evenly throughout the year. Exchange rates are as follows ($/€): Beginning of 2020 Average for 2020 End of 2020 ... Rate when assets related to depreciation and amortization were acquired Rate when dividends declared... Rate when long-term interest borrowings occurred $1.30 1.24 1.20 .. 1.45 1.21 1.25 Required a. Prepare a schedule to compute Amcrest's 2020 remeasurement gain or loss, assuming Amcrest's functional currency is the U.S. dollar. b. Prepare a schedule to compute Amcrest's 2020 translation gain or loss, assuming Amcrest's func- tional currency is the euro. Amcrest France Sarl, located in Paris. France, is a financial subsidiary of Target Corporation, a U.S. company. Amcrest's accounts are re- ported in euros. Assume that the following data relate to Amcrest's activities for 2020 (in millions). Net monetary liabilities, beginning of year. Net assets, beginning of year.. Transactions during 2020: €(15,000) 5,400 72,000 59,000 Sales.. Inventory purchases.. Depreciation and amortization Cost of sales... Cash operating expenses. Dividends declared and paid New long-term interest borrowings 1,000 61,000 9,500 100 300 Sales, inventory purchases, and cash operating expenses were reported evenly throughout the year. Exchange rates are as follows ($/€): Beginning of 2020 Average for 2020 End of 2020 ... Rate when assets related to depreciation and amortization were acquired Rate when dividends declared... Rate when long-term interest borrowings occurred $1.30 1.24 1.20 .. 1.45 1.21 1.25 Required a. Prepare a schedule to compute Amcrest's 2020 remeasurement gain or loss, assuming Amcrest's functional currency is the U.S. dollar. b. Prepare a schedule to compute Amcrest's 2020 translation gain or loss, assuming Amcrest's func- tional currency is the euro.

Answer rating: 100% (QA)

a conversion of Euro to brings gain on account of foreign exchange translation to 4646 as detailed i... View the full answer