Salalah Corporation, the Omani affiliate of a U.S manufacturer, has the balance sheet shown below. The current

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Salalah Corporation, the Omani affiliate of a U.S manufacturer, has the balance sheet shown below. The current exchange rate is $ 3.25= OMR 1.
Assets OMR Liabilities OMR
Cash Accounts Receivables
Inventories Fixed assets net
Total 35,000
80,000
120,000
205,000
440,000 Accounts payable
Long-term debt
Stockholders’ equity

Total 115,000
145,000
180,000

440,000

Required:

A. If the OMR appreciate by 30 percent, what would be the translation effects under current- noncurrent method?

B. If the OMR depreciated by 25 percent, what would be the translation effects under the monetary- nonmonetary method?

Related Book For answer-question

Economics

ISBN: 978-0073375694

18th edition

Authors: Campbell R. McConnell, Stanley L. Brue, Sean M. Flynn

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Posted Date: Feb 06, 2021 01:01 AM

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Salalah Corporation, the Omani affiliate of a U.S manufacturer, has the balance sheet shown below. The current

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The above question relates to translation exposure of currency The translation risk refers to accounting risk for the transactions of the company on account of fluctuations in exchange rates The trans... View the full answer

Economics

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