Foreign Currency Translation U.S. Multi Company established a foreign subsidiary, called EorSub Company, on January 1,...
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Foreign Currency Translation U.S. Multi Company established a foreign subsidiary, called EorSub Company, on January 1, 2,013. The local currency is the crown; on the date the subsidiary was established, the exchange rate was 2 crowns to 1 U.S. dollar. U.S. Multi invested U.S.$6,000 to get things started. In addition, a local loan in the amount of 8,000 crowns, equivalent to U.S.$4,000, was obtained. EorSub used the 20,000 crowns in initial financing to acquire the following assets: Cash ****** Accounts receivable Inventory. Land Total assets a. b. C. Assume that EorSub conducted the following business operations during 2,013: Sales were 100,000 crowns. Cash Accounts receivable. Inventory Land (in crowns) Expenses totaled 90,000 crowns. Dividends paid were 2,000 crowns. The December 31, 2,013, balance sheet differs from the January 1 balance sheet and is as follows: Total assets 2,000 4,000 6,000 8.000 20.000 Assume the following exchange rates: End of year. Average for the year Rate when dividends were paid (In crowns) 3.000 6,000 11.000 8.000 28.000 4.0 3.0 3.5 Comments Header & Footer 1. Prepare a translated balance sheet, in U.S. dollars, for EorSub, as of December 31, 2,013. Round all amounts to the nearest whole dollar, and enter negative balances as negative amounts. ForSub Company Balance Sheet December 31, 2,013 Total assets $ $ $ D Focus 2. Prepare a translated income statement for 2,013. Round all amounts to the nearest whole dollar, and enter all amounts as positive values. ForSub Company Income Statement December 31, 2,013 Sales Expenses Net income SA $ Foreign Currency Translation U.S. Multi Company established a foreign subsidiary, called EorSub Company, on January 1, 2,013. The local currency is the crown; on the date the subsidiary was established, the exchange rate was 2 crowns to 1 U.S. dollar. U.S. Multi invested U.S.$6,000 to get things started. In addition, a local loan in the amount of 8,000 crowns, equivalent to U.S.$4,000, was obtained. EorSub used the 20,000 crowns in initial financing to acquire the following assets: Cash ****** Accounts receivable Inventory. Land Total assets a. b. C. Assume that EorSub conducted the following business operations during 2,013: Sales were 100,000 crowns. Cash Accounts receivable. Inventory Land (in crowns) Expenses totaled 90,000 crowns. Dividends paid were 2,000 crowns. The December 31, 2,013, balance sheet differs from the January 1 balance sheet and is as follows: Total assets 2,000 4,000 6,000 8.000 20.000 Assume the following exchange rates: End of year. Average for the year Rate when dividends were paid (In crowns) 3.000 6,000 11.000 8.000 28.000 4.0 3.0 3.5 Comments Header & Footer 1. Prepare a translated balance sheet, in U.S. dollars, for EorSub, as of December 31, 2,013. Round all amounts to the nearest whole dollar, and enter negative balances as negative amounts. ForSub Company Balance Sheet December 31, 2,013 Total assets $ $ $ D Focus 2. Prepare a translated income statement for 2,013. Round all amounts to the nearest whole dollar, and enter all amounts as positive values. ForSub Company Income Statement December 31, 2,013 Sales Expenses Net income SA $
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Related Book For
Fundamental financial accounting concepts
ISBN: 978-0078025365
8th edition
Authors: Thomas P. Edmonds, Frances M. Mcnair, Philip R. Olds, Edward
Posted Date:
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