A multinational Corporation based in the United States of America has subsidiaries in the UK, Canada, and
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Question:
A multinational Corporation based in the United States of America has subsidiaries in the UK, Canada, and France. As at December 31, 2020, inter-company indebtedness were as follows:
Debtors | Creditors | Amount | Currency |
UK | Canada | 1,500,000 | Can$ |
UK | France | 600,000 | Euro (€) |
France | Canada | 800,000 | Can$ |
Canada | UK | 94,000 | Sterling (£) |
Canada | France | 400,000 | Euro (€) |
It is the policy company’s policy to net off inter-company balances to the greatest extent possible. The central treasury department is to use the following exchange rates for these purposes:
US$1 =Can$1.237/€0.8620/£0.729
Required:
Calculate the net payment to be made between the subsidiaries after netting off inter-company balances, by presenting the payoff in a matrix/table format.
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