North Rustico Corp. purchased all the outstanding shares Tuna Corp. for 13 million Tunisian Dinars (TND)...

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North Rustico Corp. purchased all the outstanding shares Tuna Corp. for 13 million Tunisian Dinars (TND) on December 31, Year 1. On that date, the fair values of Tuna's assets and liabilities were equal to their carrying amounts. The Year 2 and Year 1 comparative balance sheets for Tuna are below: Balance Sheet December 31 Year 2 Year 1 Current monetary assets TND 10,780,000 TND 9,600,000 Inventory 1,800,000 2,400,000 Plant and equipment 6,600,000 7,200,000 19,180,000 19,200,000 |Current monetary liabilities 1,900,000 2,400,000 Bonds payable Dec. 31, Year 6 4,800,000 4,800,000 Common shares 5,000,000 5,000,000 Retained earnings 7,480,000 7,000,000 19,180,000 19,200,000 Income Statement Year ended December 31, Year 2 Sales TND 16,000,000 Inventory, Jan. 1 2,400,000 Purchases 10,840,000 Inventory, Dec. 31 (1,800,000) Depreciation expense 600,000 Other expenses 2,360,000 14,400,000 Net income 1,600,000 Other information: Exchange rates: Dec. 31, Year 1 TND1 = $ 0.52 Sept. 30, Year 2 TND1 = $ 0.62 Dec. 31, Year 2 TND1 = $ 0.65 Average for Year 2 TND1 = $ 0.58 Tuna declared and paid dividends on September 30, Year 2. The inventory on December 31, Year 2, was purchased when the exchange rate was TND1 = $0.63. Required: a) Assume Tuna Corp.'s functional currency is the Canadian dollar. Calculate the Year 2 exchange gain or loss resulting from the translation of Tuna's financial statements. ii. Prepare translated financial statements for Year 2. b) Assume Tuna Corp.'s functional currency is the Tunisian dinar. Calculate the Year 2 exchange gain or loss resulting from the translation of Tuna's financial statements. ii. Prepare translated financial statements for Year 2. North Rustico Corp. purchased all the outstanding shares Tuna Corp. for 13 million Tunisian Dinars (TND) on December 31, Year 1. On that date, the fair values of Tuna's assets and liabilities were equal to their carrying amounts. The Year 2 and Year 1 comparative balance sheets for Tuna are below: Balance Sheet December 31 Year 2 Year 1 Current monetary assets TND 10,780,000 TND 9,600,000 Inventory 1,800,000 2,400,000 Plant and equipment 6,600,000 7,200,000 19,180,000 19,200,000 |Current monetary liabilities 1,900,000 2,400,000 Bonds payable Dec. 31, Year 6 4,800,000 4,800,000 Common shares 5,000,000 5,000,000 Retained earnings 7,480,000 7,000,000 19,180,000 19,200,000 Income Statement Year ended December 31, Year 2 Sales TND 16,000,000 Inventory, Jan. 1 2,400,000 Purchases 10,840,000 Inventory, Dec. 31 (1,800,000) Depreciation expense 600,000 Other expenses 2,360,000 14,400,000 Net income 1,600,000 Other information: Exchange rates: Dec. 31, Year 1 TND1 = $ 0.52 Sept. 30, Year 2 TND1 = $ 0.62 Dec. 31, Year 2 TND1 = $ 0.65 Average for Year 2 TND1 = $ 0.58 Tuna declared and paid dividends on September 30, Year 2. The inventory on December 31, Year 2, was purchased when the exchange rate was TND1 = $0.63. Required: a) Assume Tuna Corp.'s functional currency is the Canadian dollar. Calculate the Year 2 exchange gain or loss resulting from the translation of Tuna's financial statements. ii. Prepare translated financial statements for Year 2. b) Assume Tuna Corp.'s functional currency is the Tunisian dinar. Calculate the Year 2 exchange gain or loss resulting from the translation of Tuna's financial statements. ii. Prepare translated financial statements for Year 2.

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