Watson Company has a subsidiary in the country of Alonza where the local currency unit is the
Question:
The subsidiary acquired the inventory on August 1, 2012, and the land and buildings in 2000. It issued the common stock in 1998. During 2013, the following transactions took place:
2013
Feb. 1 Paid 5,000 KM on the note payable.
May 1 Sold entire inventory for 15,000 KM on account.
June 1 Sold land for 5,000 KM cash.
Aug. 1 Collected all accounts receivable.
Sept. 1 Signed long-term note to receive 6,000 KM cash.
Oct. 1 Bought inventory for 12,000 KM cash.
Nov. 1 Bought land for 4,000 KM on account.
Dec. 1 Paid 3,000 KM cash dividend to parent.
Dec. 31 Recorded depreciation for the entire year of 2,000 KM.
The exchange rates for 1 KM are as follows:
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . KM 1 5 $0.24
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 5 0.21
August 1, 2012 . . . . . . . . . . . . . . . . . . . . . . 1 5 0.31
December 31, 2012 . . . . . . . . . . . . . . . . . . . 1 5 0.32
February 1, 2013 . . . . . . . . . . . . . . . . . . . . . 1 5 0.33
May 1, 2013 . . . . . . . . . . . . . .. . . . . . . . . . . 1 5 0.34
June 1, 2013 . . . . . . . . . . . . . .. . . . . . . . . . . 1 5 0.35
August 1, 2013 . . . . . . . . . . . .. . . . . . . . . . . 1 5 0.37
September 1, 2013 . . . . . . . . . . . . . . . . . . . . 1 5 0.38
October 1, 2013 . . . . . . . . . . . . . . . . . . . . . . 1 5 0.39
November 1, 2013. . . . . . . . . . . . . . . . . . . . . 1 5 0.40
December 1, 2013 . . . . . . . . . .. . . . . . . . . . . 1 5 0.41
December 31, 2013 . . . . . . . . . . . . . . . . . . . . 1 5 0.42
Average for 2013. . . . . . . . . . . . . . . . . . . . . . 1 5 0.37
a. If this is a translation, what is the translation adjustment determined solely for 2013?
b. If this is a re-measurement, what is the re-measurement gain or loss determined solely for 2013?
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
Step by Step Answer:
Fundamentals of Advanced Accounting
ISBN: 978-0077667061
5th edition
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik