Superbuy, located in Germany, is a subsidiary of Plentistores, a U.S. retail company. Superbuy reports the following financial results for 2020:
 

Sales	€100,000,000
Cost of sales	75,000,000
Operating expenses	20,000,000
Dividends	1,000,000

 

Additional information for 2020:

Beginning retained earnings, remeasured	$15,000,000
Beginning retained earnings, translated	$20,000,000
Beginning net monetary liabilities	€(50,000,000)
Beginning net assets	€85,000,000
Beginning inventory balance	€2,000,000
Ending inventory balance	€3,500,000

 

• Operating expenses include €8,000,000 in depreciation and amortization on assets acquired when the exchange rate was $1.40/€. 

• Dividends were declared when the exchange rate was $1.18/€. 

• Sales and inventory purchases were made evenly throughout the year. 

• The beginning inventory was purchased when the exchange rate was $1.25/€, and the ending inventory was purchased when the exchange rate was $1.17/€.

Exchange rates ($/€):

Beginning of 2020	$1.25
Average for 2020	1.20
End of 2020	1.17

 

Required 

a. Assume the functional currency of Superbuy is the euro. Calculate the subsidiary’s translated ending retained earnings, in U.S. dollars. 

 

Do not use negative signs with any of your answers below.

		$
Beginning translated retained earnings		$Answer
Net income		Answer
Dividends		Answer
Ending translated retained earnings		$Answer

 

 

b. Assume the functional currency of Superbuy is the U.S. dollar. Calculate the subsidiary’s remeasured ending retained earnings, in U.S. dollars.

 

Instructions for the Remeasured gain or loss:

1. Use negative signs with answers to indicate a negative exposed position.

2. Use negative signs with answers that reduce the exposed position balance. 

3. Using the drop-down menu at the bottom of the table and select the appropriate answer. 

However, do not use a negative sign with numerical answer for measured gain or loss.

Remeasured gain or loss:		€	$/€	$
Beginning exposure		Answer	Answer	$Answer
Sales		Answer	Answer	Answer
Purchases		Answer	Answer	Answer
Out-of-pocket expenes		Answer	Answer	Answer
Dividends		Answer	Answer	Answer
				Answer
Ending exposure		Answer	Answer	Answer
AnswerRemeasurement gainRemeasurement loss				$Answer

 

However, do not use a negative sign with numerical answer for measured gain or loss.

Remeasured cost of sales:		€	$/€	$
Beginning inventory		Answer	Answer	$Answer
Purchases		Answer	Answer	Answer
Ending inventory		Answer	Answer	Answer
Remeasured cost of sales				$Answer

 

 

Do not use negative signs with any of your answers below.

Remeasured operating expenses:		€	$/€	$
Out-of-pocket expenses		(computed above)		$Answer
Depreciation/amortization		Answer	Answer	Answer
Remeasured operating expenses				$Answer

 

 

Do not use negative signs with any of your answers below.

Remeasured net income:		$
Sales		$Answer
Cost of sales		Answer
Operating expenses		Answer
Remeasurement gain or loss		Answer
Remeasured net income		$Answer

 

 

Do not use negative signs with any of your answers below.

Ending remeasured retained earnings		$
Beginning remeasured retained earnings		$Answer
Net income		Answer
Dividends		Answer
Ending remeasured retained earnings		$Answer

Answer rating: 100% (QA)

Required a Sales 10000000000 Less Cost of sales Gross prof... View the full answer