C3. Boerkian Co. started 2011 with two assets: Cash of $26,000 (Stickles) and Land that originally...

 

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C3. Boerkian Co. started 2011 with two assets: Cash of $26,000 (Stickles) and Land that originally cost $72,000 when acquired on April 4, 2008. On May 1, 2011, the company rendered services to a customer for $36,000, an amount immediately paid in cash. On October 1, 2011, the company incurred an operating expense of $22,000 that was immediately paid. No other transactions occurred during the year so an average exchange rate is not necessary. Currency exchange rates were as follows: April 4, 2008 January 1, 2011 May 1, 2011 October 1, 2011 December 31, 2011 $1 = $.28 $1 = $.29 $1 = $.30 1 = $.31 $1 = $.35 Assume Boerkian was a foreign subsidiary of a U.S. multinational company and the U.S. dollar was the functional currency of the subsidiary. Prepare a schedule of changes in the net monetary assets of Boerkian for the year 2011 and properly label the resulting gain or loss. C3. Boerkian Co. started 2011 with two assets: Cash of $26,000 (Stickles) and Land that originally cost $72,000 when acquired on April 4, 2008. On May 1, 2011, the company rendered services to a customer for $36,000, an amount immediately paid in cash. On October 1, 2011, the company incurred an operating expense of $22,000 that was immediately paid. No other transactions occurred during the year so an average exchange rate is not necessary. Currency exchange rates were as follows: April 4, 2008 January 1, 2011 May 1, 2011 October 1, 2011 December 31, 2011 $1 = $.28 $1 = $.29 $1 = $.30 1 = $.31 $1 = $.35 Assume Boerkian was a foreign subsidiary of a U.S. multinational company and the U.S. dollar was the functional currency of the subsidiary. Prepare a schedule of changes in the net monetary assets of Boerkian for the year 2011 and properly label the resulting gain or loss.