Models should use formulas where it is necessary (point of models is to automate the work). Create model so the user can simply enter whatever ending rate they desire, and the model computes the translation adjustment automatically. Highlight in yellow the cells that the user can update AND the model updates automatically.

 

Exhibit 11.5 Ganado Europe's Translation Loss After Depreciation of the Euro: Current Rate Method December 31, 2015 Assets Cash Accounts receivable Inventory Net plant and equipment Total Liabilities and Net Worth Accounts payable Short-term bank debt Long-term debt Common stock Retained earnings Translation adjustment (CTA) Total In Euros () 1,600,000 3,200,000 2,400,000 4,800,000 12,000,000 800,000 1,600,000 1,600,000 1,800,000 6,200,000 12,000,000 Exchange Rate (US$/euro) 1.2000 1.2000 1.2000 1.2000 1.2000 1.2000 1.2000 1.2760 1.2000(a) Translated Accounts (b) Translated into dollars at the same rate as before depreciation of the euro. (US$) $ 1,920,000 3,840,000 2,880,000 5,760,000 $14,400,000 $ 960,000 1,920,000 1,920,000 2,296,800 7,440,000 $ (136,800) $14,400,000 Exchange Rate (US$/euro) 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.2760 January 2, 2016 1.2000(b) Translated Accounts (US$) $1,600,000 3,200,000 2,400,000 4,800,000 $12,000,000 $ 800,000 1,600,000 1,600,000 2,296,800 7,440,000 $(1,736,800) $12,000,000 (a) Dollar retained earnings before depreciation are the cumulative sum of additions to retained earnings of all prior years, translated at exchange rates in each year.