Home Insert Draw Page Layout Formulas Data Review View Automate Tell me Comments LE Share Arial 10 AA ap Wrap Text v General V v Paste BI UV OvAv Merge & Center v $ ~ % 9 Conditional Format Cell Insert Delete Format Sort & Find & Analyze Formatting as Table Styles DV Filter Select Data K33 X V fx B C D E F G H J K M N P Q R S T Week 6 Excel Case - Translating Foreign Currency Financial Statements Current Rate Method Temporal Method FC Current Rate Temporal December 31, 2021 FC Rate USD Rate USD Sales 5,800 $ 0.63 AS 3,654 $ 0.63 A $ 3,654 CA 4,200 $ 2,352 $ 2,472 6 Cost of goods sold (3,200) $ 0.63 A 2,016 (2,092 CL 1,500 $ 840 $ 840 Gross profit 2.600 1.638 $ 1,562 Current ratio 2.8 2.8 2.9429 8 Selling expense (500) $ 0.63 A (315) $ $ (315) 9 Depreciation expense (700) $ 0.63 A (441) $ 0.68 H $ (476) Total liabilities 5,000 $ 2,800 $ 2,800 10 Remeasurement gain/loss S 377 Total stockholders' equity 5,500 $ 3,080 3,956 Income before tax 1,400 882 $ 1,148 Debt to equity 0.9091 0.9091 0.7078 12 Income taxes (400) $ 0.63 A (252) $ $ (252) Net income 1,000 630 896 NI 1,000 $ 630 $ 896 14 Retained earnings, 1/1/21 Sales 5,800 3,654 $ 3,654 Ret. earnings, 12/31/21 1,000 630 $ 896 Profit margin .1724 0.1724 0.2452 16 17 Cash 1,800 $ 0.56 C $ 1,008 $ 0.56 C $ 1,008 NI 1,000 $ 630 $ 896 8 Inventory 2,400 0.56 $ 1,344 0.61 1,464 Average TSE 5,000 $ 3,070 $ 3,508 19 Fixed assets 7,000 $ $ 0.68 H $ 4,760 Return on equity 0.20 0.2052 0.2554 0 Less: accum/deprec (700) S 0.56 C S (392) $ 0.68 H $ (476) Total assets 10,500 5,880 6,756 COGS 3,200 $ 2,016 $ 2,092 Average Inventory 1,200 $ 672 732 23 Current liabilities 1,500 $ 0.56 C $ 840 $ 0.56 C $ 840 Inventory turnover 2.67 3.00 2.86 24 Long-term debt 3,500 0.56 1,960 $ 0.56 1,960 25 Contributed capital 4,500 $ 0.68 H 3,060 0.68 H S 3,060 26 Cum. trans. adjust. (610) Retained earnings 1,000 630 896 Total liab and stock equity 10,500 5,880 6,75 29 e Rates Temporal method-COGS (on a FIFO basis) January 1-31, 2021 (H) 0.68 BI 2,000 0.68 $ 1,360.00 Average 2021 (A) 0.63 3,600 0.61 $ 2,196.00 33 December 31, 2021 (C) 0.56 El (2,400) 0.61 $ (1,464.00) 34 Inventory purchases 0.61 COGS 3,200 2,092.00 35 Key: 36 Average Exchange Rate Current Exchange Rate 38 Historical Exchange Rate 39 10 *Computation of Translation Adjustment FC USD 42 Net assets, 1/1/21 4500 $ 0.68 3,060.00 43 Net income, 2021 1000 S 0.63 630.00 4 Net assets, 12/31/21 550 3,690.00 5 Net assets, 12/31/21 at current exchange rate 5500 $ 0.56 S 3,080.00 7 8 Translation adjustment (negative) 610.00