Here is the homework example we used in CH 10 for current rate method. I have made a change on the exchange rate on 1/1/2010 (from 0.50 to 0.52). Everything else remains the same. Please make necessary updates on the worksheet (10 points) 1/1/2010: Subsidiary was formed. Ex. Rate was 0.50 0.52. 1/1/2015: Exchange rate was 0.60 4/1/2015: Property was purchased; Ex. Rate was 0.62 4/15/2015: All the long-term debt were incurred; Ex.. Rate was 0.63. 10/1/2015: Dividends were declared; Ex. Rate was 0.67 12/31/2015: Exchange rate was 0.68 Avg. Rate for 2015: 0.64 Assumptions 1. Sales and inventory purchases ocurred evenly throughout the year 2. Common Stock and APIC have never changed since the recognition on 1/1/2010 3. Patent is fully amortized, hence no "patent" in balance sheet. Patent was acquired 1/1/2012, when Ex. Rate was 0.58 Current Rate Method CHF Sales Cost of Goods Sold Gross Profit Depreciation Expense Exchange Rate 3.000.000 0.64 A (2.000.000) 0.64 A 1.000.000 Updated Exchange Rate USD Updated USD 1.920.000 (1.280,000) 640,000 (35.000) 0.64 A (22.400) Amortization Expense (25.000) 0.64 A (16.000) Other Expenses Income Before Taxes 110,000) 0.64 A (70.4001 Income Taxes 830,000 n/a (249,000 0.64 A $31.300 (159.360) Currency Exchange Gain/Loss Net Income $81,000 na 371.840 Retained Earnings, 1/1 100.000 0.64 (given) Net Income Dividends 301,000 aa (150,000) 0.67 H (above) Retained Earnings. 12/31 $31.000 64,000 371.840 (100.500) 335.440 Assets CHF Exchange Rate USD Cash Accounts Receivable 121.000 100.000 68,000 Inventory (evenly acquired this year) 436000 0.68 303.000 Property and Equipment 1.000.000 0.68 C 660.000 Accumulated Depreciation 2010001 1.600 Total Assets 1351.000 1.054,680 Liabilities and Equity Accounts Payable 500.000 $30,000 Long-term Debt 200,000 0.63 136.000 Common Stock 100,000 0.50 H 50,000 (2) Additional PIC Retained Earnings 12/31 OCI-Cumulative Trans. Adj. Total Liabilities and Equity 1.551,000 wa Asse 220,000 0.50 (3) 110.000 140 $31,000 a (above) 035,340 plug-in Total 83.340 (5) 1.054.680