1- Remeasure the above figures from euros to British pounds as at 31/12/2020 2- Calculate the subsidiary's...
Fantastic news! We've Found the answer you've been seeking!
Question:
1- Remeasure the above figures from euros to British pounds as at 31/12/2020
2- Calculate the subsidiary's net income (or net loss) as at 31/12/2020
Transcribed Image Text:
8. On 31/12/2020 a British company (uses British pound for reporting) has a wholly-owned Italian subsidiary (uses euro for pound Following is the trial balance for the Italian company on 31/12/2020 31/12/2020 Dr Cr Cash 1,000 Accounts receivable 2,000 Inventory 3,000 Property, plant, & Equipment 10,000 Cost of goods sold 7,000 Depreciation expense 2,000 Other expenses 5,000 Sales 17,000 Accounts payable 1,000 Capital 8,000 Retained earnings 4,000 TOTAL 30,000 30,000 Following are relevant exchange rates 31/12/2020 0.65 1/1/2020 0.75 0.66 Average 2020 0.85 10/10/2015 Date when PPE was purchased 18/12/2020 Date when endinr inventory was purchased 0.71 0.90 1/1/2015 Date for subsidiary purchase Notes: The subsidiary was purchased on 1/1/2015. Capital has not changed since then. b- Cost of goods sold is for inventory purchased at the average rate for 2020 Required: 1- Remeasure the above fgures from euros to British pounds as at 31/12/2020 8. On 31/12/2020 a British company (uses British pound for reporting) has a wholly-owned Italian subsidiary (uses euro for pound Following is the trial balance for the Italian company on 31/12/2020 31/12/2020 Dr Cr Cash 1,000 Accounts receivable 2,000 Inventory 3,000 Property, plant, & Equipment 10,000 Cost of goods sold 7,000 Depreciation expense 2,000 Other expenses 5,000 Sales 17,000 Accounts payable 1,000 Capital 8,000 Retained earnings 4,000 TOTAL 30,000 30,000 Following are relevant exchange rates 31/12/2020 0.65 1/1/2020 0.75 0.66 Average 2020 0.85 10/10/2015 Date when PPE was purchased 18/12/2020 Date when endinr inventory was purchased 0.71 0.90 1/1/2015 Date for subsidiary purchase Notes: The subsidiary was purchased on 1/1/2015. Capital has not changed since then. b- Cost of goods sold is for inventory purchased at the average rate for 2020 Required: 1- Remeasure the above fgures from euros to British pounds as at 31/12/2020
Expert Answer:
Answer rating: 100% (QA)
Calculation of Net income or loss of subsidiary as at 31122020 Particulars Amount in Euros Sales 170... View the full answer
Related Book For
Intermediate Accounting principles and analysis
ISBN: 978-0471737933
2nd Edition
Authors: Terry d. Warfield, jerry j. weygandt, Donald e. kieso
Posted Date:
Students also viewed these accounting questions
-
Use the node-voltage method to find all the node voltages in the circuit below. Then calculate the power consumed or delivered by the dependent voltage source. Show all your steps using the given...
-
The basis for dividing partnership net income or net loss is referred to as any of the following except the a. income ratio b. income and loss ratio. c. profit and loss ratio. d. income sharing ratio
-
In relation to the need for consolidated financial information, which of the following sentences is correct? A The purpose of the consolidation is to develop and present a set of financial statements...
-
As we continue our discussions regarding revenue's associated with public sector, this will help reinforce some of the ideas regarding taxes on goods and services. Through the next week, save your...
-
For the Valencia Products constraints and identify the feasible region. Then identify each of the corner points and show how increasing the objective function value identifies the optimal solution....
-
Explain why companies with the same credit rating can have very different capital structures.
-
White Company can invest in one of two projects, TD1 or TD2. Each project requires an initial investment of $101,250 and produces the year-end cash inflows shown in the following table. Required 1....
-
(One Difference, Multiple Rates, Effect of Beginning Balance versus No Beginning Deferred Taxes) At the end of 2010, Wasicsko Company has $180,000 of cumulative temporary differences that will result...
-
Scenario 17:Accountant 17 is the former manager of the audit dept. She says: when covid hit I decidedto retire. I was a cpa for 30 years but im no longer practicing, can I still call myself a cpa? Do...
-
Conroy Company manufactures two products-B100 and A200. The company provided the following information with respect to these products: B100 A200 Estimated customer demand (in units) Selling price per...
-
What misalignment(s) caused channel conflict between manufacturers and dealers in the automotive industry? How was this conflict reflected in the attitudes of GM and its dealers toward the CDK...
-
Country XYZ plans to build a high-speed rail system at an estimated cost of $6 billion. Country XYZ has decided to issue perpetual bonds to finance this plan. Investors demand a 7% return on similar...
-
The COVID-19 outbreak has affected supply chains and has attracted the attention of researchers and business experts all over the world. Moreover, the impact of the pandemic on society and economy...
-
What assumptions and values undergird the Machiavellian leadership style? If power and politics are more important than achievements/performance to impact organizations, does this justify this style...
-
Sunny Corp. is looking into building a project that has the following characteristics: - it is a new area of business for Sunny Corp. -upfront cost is $1,000,000 -$100,000 of revenue for fifteen...
-
What should an insurance manager do if structural changes within their organization are slowing down production/disrupting workflow? Revert to the old organizational structure or find other ways to...
-
9. Complete the blanks in the following question with the appropriate answer. Consider an interface between two modules, Module A & Module B, operating at frequencies fA & fB respectively. Choose the...
-
On average there are four traffic accidents in a city during one hour of rush-hour traffic. Use the Poisson distribution to calculate the probability that in one such hour there arc (a) No accidents...
-
How can earnings management affect the quality of earnings?
-
On July 1, 2008, Soriano Corporation granted 10,000 options to executives. Each option entitles the holder to purchase one share of Sorianos $10 par value common stock at $100 per share at any time...
-
Grace Inc. has recently reported steadily increasing income. The company reported income of $20,000 in 2005, $25,000 in 2006, and $30,000 in 2007. A number of market analysts have recommended that...
-
Identify and briefly describe the purpose and functions of a management system, work process and organization policy.
-
Identify and describe the meaning of the term's formalization and informal.
-
Describe the link between the size of an organization and the formalization process.
Study smarter with the SolutionInn App