TranscribedText: Question 22 of 23 /40 marks Instructions Show In 20X0, Canterra Company invested $1,500,000 CDN (600,000FC) to establish a foreign subsidiary, Forterra Ltd. Forterra took out a $240,000 FC bank loan to help finance the purchase of equipment and furniture. At the time the loan was taken out, the exchange rate was 1FC = $2.40 CDN. The loan principal is not required to be repaid for five years. Forterra purchased equipment costing 720,000FC when the exchange was 1FC = $2.30 CDN. After a very successful first year of operations, Forterra decided to purchase a tract of land for 240,000FC. The exchange rate at the time of purchase was 1FC = $1.90 CDN. Forterra's policy is to declare and pay dividends at its year-end. Both Canterra and Forterra have December 31 year-ends. Forterra has provided the following information: Forterra Ltd. Statement of Financial Position as of December 31 (in FC) 20X1 20X0 Assets: Cash 36,000 192,000 Accounts receivable 48,000 36,000 Land 240,000 Copyright @ 2024 FastTrack Technologies Inc. All Rights Reserved. Terms of Use | Privacy Policy | Contact Us | Attribu T NEWForterra has provided the following information: Forterra Ltd Statement of Financial Position as of December 31 (in FC) 20X1 20XO Assets Cash 36,000 192,000 Accounts receivable 48.000 36,000 Land 240,000 Equipment and furniture 720,000 720,000 Accumulated depreciation (144,000) (72,000) Total assets 900 000 | 876.000 Liabilities and shareholders' equity: Liabilities. Accounts payable (current) 12,000 24,000 Bank loan (long-term) 240,000 240,000 Total liabilities 252,000 264,000 Shareholders' equity: Common shares 600,000 | 600,000 Retained earnings 48,000 12,000 Total shareholders' equity 648,000 612,000 Total liabilities and shareholders' equity 900.000 876.000 Forterra Ltd. Statement of Income for the year ended December 31 (in FC) 20X1 20XO Copyright @ 2024 FastTrack Technologies Inc. All Rights Reserved. Terms of Use | Privacy Policy | CorRetained earnings 48.000 12 000 Total shareholders' equity 648 000 612,000 Total liabilities and shareholders' equity 900.000 876.000 Forterra Ltd. Statement of Income for the year ended December 31 (in FC) 20X1 20XO Revenue 360,000 264,000 Expenses: Depreciation expense 72,000 72,000 Interest expense 48,000 48,000 Other expenses 144,000 96.000 Total expenses 264.000 216,000 Net income 96 000 48,000 Exchange Rates 20X0 average 1FC = $2.20 CDN 20X0 year-end 1FC = $2.00 CDN 20X1 average 1FC = $1.70 CDN 20X1 year-end / 1FC = $1.50 CDN Required: a. Calculate Forterra's cumulative translation gain/loss for 20X1, using the presentation currency method. b. Calculate Forterra's cumulative translated gain/loss for 20X1 using the functional currency method. /18 Answer a. BIUEd GO C French Spanish Copyright @ 2024 FastTrack Technologies Inc. All Rights Reserved. Terms of Use | Privacy Policy

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Question 22 of 23 Instructions Show /40 marks In 20X0, Canterra Company invested $1,500,000 CDN (600,000FC) to establish a foreign subsidiary, Forterra Ltd. Forterra took out a $240,000 FC bank loan to help finance the purchase of equipment and furniture. At the time the loan was taken out, the exchange rate was 1FC = $2.40 CDN. The loan principal is not required to be repaid for five years. Forterra purchased equipment costing 720,000FC when the exchange was 1FC = $2.30 CDN. After a very successful first year of operations, Forterra decided to purchase a tract of land for 240,000FC. The exchange rate at the time of purchase was 1FC = $1.90 CDN. Forterra's policy is to declare and pay dividends at its year-end. Both Canterra and Forterra have December 31 year-ends. Forterra has provided the following information: Forterra Ltd. Statement of Financial Position as of December 31 (in FC) Assets: Cash Accounts receivable Land NEW 20X1 20X0 36,000 192,000 36,000 48,000 240,000 Copyright 2024 FastTrack Technologies Inc. All Rights Reserved. Terms of Use | Privacy Policy | Contact Us | Attribut Question 22 of 23 Instructions Show /40 marks In 20X0, Canterra Company invested $1,500,000 CDN (600,000FC) to establish a foreign subsidiary, Forterra Ltd. Forterra took out a $240,000 FC bank loan to help finance the purchase of equipment and furniture. At the time the loan was taken out, the exchange rate was 1FC = $2.40 CDN. The loan principal is not required to be repaid for five years. Forterra purchased equipment costing 720,000FC when the exchange was 1FC = $2.30 CDN. After a very successful first year of operations, Forterra decided to purchase a tract of land for 240,000FC. The exchange rate at the time of purchase was 1FC = $1.90 CDN. Forterra's policy is to declare and pay dividends at its year-end. Both Canterra and Forterra have December 31 year-ends. Forterra has provided the following information: Forterra Ltd. Statement of Financial Position as of December 31 (in FC) Assets: Cash Accounts receivable Land NEW 20X1 20X0 36,000 192,000 36,000 48,000 240,000 Copyright 2024 FastTrack Technologies Inc. All Rights Reserved. Terms of Use | Privacy Policy | Contact Us | Attribut