Question: How do I work and show this problem? Tristan Narvaja, S.A., is the Uruguayan subsidiary of a U.S. manufacturing company. Its balance sheet for January

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Tristan Narvaja, S.A., is the Uruguayan subsidiary of a U.S. manufacturing company. Its balance sheet for January 1 follows. The January 1 exchange rate between USD and the peso Uruguayan ($U) is $U20/$. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1, using the current rate method.

Balance Sheet (thousands of pesos Uruguayo, $U)

AssetsJanuary 1Exchange rate ($U/US$)

Cash60,00020.00

Accounts receivable120,00020.00

Inventory120,00020.00

Net plant and equip.240,00020.00

540,000

Liabilities and Net Worth

Current Liabilities30,00020.00

Long-term debt90,00020.00

Capital Stock300,00015.00

Retained Earnings120,00015.00

540,000

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