Remeasurement of financial statements Assume that your company owns a subsidiary operating in Australia. The subsidiary...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Remeasurement of financial statements Assume that your company owns a subsidiary operating in Australia. The subsidiary has adopted the Australian Dollar (AUD) as its functional currency. Your parent company operates this subsidiary like a conclude, therefore, that the functional currency of this subsidiary is the SUS and that its financial state- division or a branch office, making all of its operating decisions, including pricing of its products. You ments must be remeasured prior to consolidation. Following are the subsidiary's financial statements (AUD) for the most recent year: Beginning inventory Purchases Ending inventory. Cost of goods sold Land Building. Accum deprec-building. Equipment Accum deprec-equipment PPE, net. Depreciation expense-building.. Depreciation expense-equipment Depreciation expense.. Income statement: Sales. Cost of goods sold. Gross profit Operating expenses. Depreciation.. Net income. Statement of retained earnings: BOY retained earnings Net income. Dividends Ending retained earnings Balance sheet: Assets Cash..... Accounts receivable Inventory PPE, net Total assets.. Liabilities and stockholders' equity Current abilities. Long-term liabilities Common stock APIC Retained earnings Total liabilities and equity (in AUD) 819,500 2,143,900 (983,400) 1,980,000 718,960 1,320,000 (660,000) 880,000 (440,000) 1,818,960 66,000 88,000 154,000 (in AUD) 3,300,000 (1,980,000) 1,320,000 (704,000) (154,000) 462,000 1,732,500 462,000 (46,200) 2,148,300 939,180 765,600 983,400 1,818,960 4,507,140 559,680 1,304,160 220,000 275,000 2.148,300 4.507,140 The relevant exchange rates for the $US value of the Australian Dollar (AUD) are as follows: BOY rate.. EOY rate.. Avg. rate... Dividend rate Historical rates: Beginning inventory. Land... Building.. Equipment Historical rate (common stock and APIC). $0.83 $0.70 $0.76 $0.71 $0.83 $0.72 $0.72 $0.72 $1.02 a. Remeasure the subsidiary's income statement, statement of retained earnings, and balance sheet into $US for the current year (assume that the BOY Retained Earnings is $1,126,899). Compute the remeasurement gain or loss directly assuming BOY net monetary assets of AUD(564,960), a net monetary liability. b. Remeasurement of financial statements Assume that your company owns a subsidiary operating in Australia. The subsidiary has adopted the Australian Dollar (AUD) as its functional currency. Your parent company operates this subsidiary like a conclude, therefore, that the functional currency of this subsidiary is the SUS and that its financial state- division or a branch office, making all of its operating decisions, including pricing of its products. You ments must be remeasured prior to consolidation. Following are the subsidiary's financial statements (AUD) for the most recent year: Beginning inventory Purchases Ending inventory. Cost of goods sold Land Building. Accum deprec-building. Equipment Accum deprec-equipment PPE, net. Depreciation expense-building.. Depreciation expense-equipment Depreciation expense.. Income statement: Sales. Cost of goods sold. Gross profit Operating expenses. Depreciation.. Net income. Statement of retained earnings: BOY retained earnings Net income. Dividends Ending retained earnings Balance sheet: Assets Cash..... Accounts receivable Inventory PPE, net Total assets.. Liabilities and stockholders' equity Current abilities. Long-term liabilities Common stock APIC Retained earnings Total liabilities and equity (in AUD) 819,500 2,143,900 (983,400) 1,980,000 718,960 1,320,000 (660,000) 880,000 (440,000) 1,818,960 66,000 88,000 154,000 (in AUD) 3,300,000 (1,980,000) 1,320,000 (704,000) (154,000) 462,000 1,732,500 462,000 (46,200) 2,148,300 939,180 765,600 983,400 1,818,960 4,507,140 559,680 1,304,160 220,000 275,000 2.148,300 4.507,140 The relevant exchange rates for the $US value of the Australian Dollar (AUD) are as follows: BOY rate.. EOY rate.. Avg. rate... Dividend rate Historical rates: Beginning inventory. Land... Building.. Equipment Historical rate (common stock and APIC). $0.83 $0.70 $0.76 $0.71 $0.83 $0.72 $0.72 $0.72 $1.02 a. Remeasure the subsidiary's income statement, statement of retained earnings, and balance sheet into $US for the current year (assume that the BOY Retained Earnings is $1,126,899). Compute the remeasurement gain or loss directly assuming BOY net monetary assets of AUD(564,960), a net monetary liability. b.
Expert Answer:
Answer rating: 100% (QA)
Summauzed the data and infromation Assume that your company a Description owns Am... View the full answer
Related Book For
Advanced Accounting
ISBN: 978-1934319307
2nd edition
Authors: Susan S. Hamlen, Ronald J. Huefner, James A. Largay III
Posted Date:
Students also viewed these accounting questions
-
n You bought 3 Crude oil futures contract from NYMEX (Contract size is 1000 barrels). The initial margin requirement is US$2,500/contract and the maintenance margin is US$1,500/contract. You will get...
-
The given function is discontinuous at x = 1 S(5/2)z- 1/2 for -1 1. O True O False
-
Translation of financial statements Assume that your company owns a subsidiary operating in France. The subsidiary conducts most of its business activities in the European Economic Union and...
-
Suppose the following game is repeated once (that is, played twice in total). Bridget Alex SB (40,40) (70,20) SA SA (20, 70) (30,30) (a) How many strategies does Alex have? (b) In an SPNE, what...
-
Assume that there are several chemical firms in an industry, each one producing different levels of an effluent, whose damage to the environment depends on the location of the firm. Compare the...
-
The reaction SO2 1g2 + 2 H2S(g) 3 S(s) + 2 H2O (g) is the basis of a suggested method for removal of SO2 from power-plant stack gases. The standard free energy of each substance is given in Appendix...
-
The basic concept behind a learning organization is: A. The popularity to change. B. The people change. C. The adaptation to change. D. The resources of change.
-
Lee Financial Services pays employees monthly. Payroll information is listed below for January 2011, the first month of Lees fiscal year. Assume that none of the employees exceeded any relevant wage...
-
313 Calibri (Body) 11 v ab General .00 X fx =IF(AND(ISNUMBER(FIND($G$10,FORMULATEXT(B13))),ISNUMBER(FIND($G$11,FORMULATEXT(B13)))),1,0) A B 1 2 Current Year Prior Year 3 Cash $7,440 $8,000 4 Accounts...
-
The following information relates to the Samson Ltd for the year ended 31 December 2023: 1. Consolidated revenue amounted to R2,311,200 for the year. The costs to deliver these goods to clients...
-
A coupon-bearing bond with a face value of $2180 and semi-annual coupons of 8% will mature in 19 years. The annual nominal yield convertible semi-annually is 4.8%. (Please keep as many decimals as...
-
How does the focus of domestic violence courts and veterans courts differ from that of drug treatment courts and other problem-solving courts?
-
What are some of the prominent limitations on the criminal law?
-
What are the two major types of leverage? Define each.
-
Do you believe your organization uses a flexible or a static budget? Why do you think so?
-
What are the advantages of adjudicating cases-for example, domestic violence cases or cases involving defendants with mental health problems-in a specialized court? Are there any disadvantages to...
-
2022 ORGA 314 Online Practice Negotiation - Job Seeker and HR Manager Description Managers Information The person is a stranger to you. You have agreed to meet with the person online for this...
-
What is the amount of total interest dollars earned on a $5,000 deposit earning 6% for 20 years?
-
The Make-A-Wish Foundation is a privately funded VHWO that grants wishes to children with life-threatening illnesses. Since 1980, it has reached over 165,000 children worldwide through a network of...
-
Fair Value Hedge with Put Options In January, 2014, Combo Corporation purchased $200,000 of 5 percent government bonds at par for its trading portfolio, carried at market pursuant to ASC Topic 320....
-
Hopeville Retreat is a private not-for-profit organization that counsels former drug addicts in readjusting to productive community life. Donations provide the major support for Hopeville Retreat....
-
Many choices involve _________ of something to do rather than whether to do something.
-
In acting rationally, people respond to _________.
-
Economists emphasize _________ thinking because the focus is on additional, or _________, choices, which involve the effects of _________ or _________ the current situation.
Study smarter with the SolutionInn App