Mikell started 2021 with cash of 60,000 and equipment that cost 45,000. On October 1, 2021...

 

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Mikell started 2021 with cash of §60,000 and equipment that cost §45,000. On October 1, 2021 Mikell paid dividends of §25,000. Mikell's operating revenues for 2021 were§550,000 and operating expenses were §375,000 (including depreciation expense of $10,000). Revenues and expenses were earned evenly throughout the year. Currency exchange rates were as follows: January 1, 2021 October 1, 2021 Average for 2021 December 31, 2021 §1 = $.50 §1 = $.55 §1 = $.54 §1 = $.58 Required: a. Assume that the stickle was the functional currency of the subsidiary (current method). Calculate the translation adjustment for this subsidiary for 2021. b. Assume that the U.S. dollar was the functional currency of the subsidiary (temporal method). Calculate the remeasurement gain or loss for 2021. Show your work Mikell started 2021 with cash of §60,000 and equipment that cost §45,000. On October 1, 2021 Mikell paid dividends of §25,000. Mikell's operating revenues for 2021 were§550,000 and operating expenses were §375,000 (including depreciation expense of $10,000). Revenues and expenses were earned evenly throughout the year. Currency exchange rates were as follows: January 1, 2021 October 1, 2021 Average for 2021 December 31, 2021 §1 = $.50 §1 = $.55 §1 = $.54 §1 = $.58 Required: a. Assume that the stickle was the functional currency of the subsidiary (current method). Calculate the translation adjustment for this subsidiary for 2021. b. Assume that the U.S. dollar was the functional currency of the subsidiary (temporal method). Calculate the remeasurement gain or loss for 2021. Show your work

Answer rating: 100% (QA)

a Translation adjustment 054 050 550000 16500 b Remeasurement gain or loss 05805... View the full answer