Example 1: Kennedy Inc. is a US based MNC that conduct a part of its business in Oman. Its Omani sales are denominated in Omani Riyal. Its income statement from Oman business at the year-end is shown below: Income Statement Particulars Amount in OMR Sales 25000 Less: Cost of goods sold 8000 Gross Profit 17000 Operating expenses 11000 EBIT 6000 Interest Expenses 2000 EBT 4000 Exchange Rates: (a) The spot exchange rate = OMR 0.3850/USD (b) The average exchange rate = OMR 0.3780/USD (c) The historical exchange rate = OMR 0.3820/USD Requirement: Translate income statement into reporting currency by using the current rate method and temporal method.

Q: On April 1, A.C. Corporation a calendar-year U.S. electronics manufacturer, buys 460000 Yen worth of…

A: As per foreign exchange rate the monetary foreign currency is recognized at the closing exchange…

Q: On April 1, A.C. Corporation a calendar-year U.S. electronics manufacturer, buys 770000 Yen worth of…

A: In the international exchange market, exposure refers to the condition in which the international…

Q: Crane Pharma just received revenues of $3,164,400 in Australian dollars (A$). Management has the…

A: The exchange rate between two currencies against a common currency is used used to compute the cross…

Q: Purple Corp starts a subsidiary in a foreign country in 2020; the subsidiary has the peso as its…

A: The consolidation of financial statement is very important to have a single financial statement for…

Q: 1. On September 1, 20X1, Cano & Company, a U.S. corporation, sold merchandise to a foreign firm for…

A: There are foreign exchange transactions that take place on credit so that the amount due is paid at…

Q: 48-Orange Incorporation is a US-based MNC that conducts a part of its business in Oman. The…

A: The entity needs to present their financial statement in their functional currency and convert the…

Q: Translate into dollars the balance sheet of Nevada Leather Goods' Spanish subsidiary. When Nevada…

A: Currency translation refers to the process of changing one currency into another currency based on…

Q: Certain balance sheet accounts of a foreign subsidiary of Orchid Company have been stated in U.S.…

A: Here, Functional currency is foreign currency, all assets measured at current rate.

Q: ABC Corp. imported a machine from the US for $50,000 on October 10, 20x1. A letter of credit was…

A: SOLUTION FOREIGN EXCHANGE RATE IS THE RATE AT WHICH ONE CURRENCY WILL BE EXCHANGED FOR ANOTHER.

Q: Orange Incorporation is a US-based MNC that conducts a part of its business in Oman. The…

A: As per accounting policies,  Sales, Cost of goods sold, and Operating Expenses are monetary items…

Q: During December of the current year, Exide company based in America, entered into the following…

A:

Q: On December 31, 2008 a foreign subsidiary in US submitted the following balances stated in foreign…

A: The translation adjustment to be reported in the consolidated statement is $123,000. It has a…

Q: Chrysler Exporters Inc., a US wholesaler is engaged in foreign trade. The following transactions…

A: Forward exchange contract: It is an agreement to exchange different currencies at a specified future…

Q: 3. On April 1, A.C. Corporation a calendar-year U.S. electronics manufacturer,  buys 550000 Yen…

A: Exposure refers to the situation of gain and loss that arise due to fluctuations in the exchange…

Q: Choose the correct. Brief, Inc., had a receivable from a foreign customer that is payable in the…

A: Foreign exchange gain = Dollar equivalent - Local currency units…

Q: HH Inc. had the following transactions: • On May 1, HH purchased parts from a foreign company (FC1)…

A: 1.

Q: Crane Pharma just received revenues of $3,164,400 in Australian dollars (A$). Management has the…

A: The exchange rates refer to the rate at which the currency of one country can be exchanged for that…

Q: A U.S. company sells a product to a British company with the transaction listed in British pounds.…

A: Journal entry: Journal entry is a set of economic events which can be measured in monetary terms.…

Q: During July 2016, Petron Corporation had the following transactions with foreign businesses: Date…

A: Foreign exchange shows the amount of one currency that has to be paid to attain another currency.…

Q: On December 5, 20X8, Texas based Imperial Corporation purchased goods from a Saudi Arabian firm for…

A: International trade includes the trade of the company with the company which is located outside the…

Q: On March 1, Laton Products (a U.S. firm) purchased manu-facturing inputs from a Mexican supplier for…

A: Currency exchange: Currency exchange is a business that has got legal right to exchange their…

Q: On January 1, Narnevik Corporation formed a subsidiary in a foreign country. On April 1, the…

A: Calculate the inventory balance as follows: Inventory balance = Amount * Exchange rate*%percentage…

Q: A new Toyota Mark Il is imported from Japan. Other details relating to this sale are as given below:…

A: Value-added tax is the tax that is levied only if there is some value added to the company.

Q: What amount of foreign exchange gain or loss should be recognized on May 8 ?

A: Given information is: ABC Corp., a US corporation, purchased goods on credit from a British company…

Q: 38-Apple Incorporation is a US-based MNC that conducts a part of its business in Oman. The…

A: An exchange rate is the value of one currency in terms of another country's currency.

Q: How much is the accounting gain/loss due to the exchange rate change?

A: Foreign Currency Financial Statements:   Foreign currency financial statements are those statements…

Q: Brief, Inc., had a receivable from a foreign customer that is payable in the customer’s local…

A:

Q: Turbo Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on…

A: a.

Q: Turbo Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on…

A:

Q: Prepare the journal entries made by Pinnacle, a U.S. company, to record the above purchase and…

A:

Q: Recording Export Transactions Daisy Brands, a U.S. company, sells items abroad. Daisy prices    many…

A: For translation into the functional currency or into a presentation currency, the following…

Q: The U.S Company, In the month of January 15 sold machinery on account to a retailer Australia. The…

A: Journal:- These are prepared by the companies with debit and credit sides in order to match the…

Q: The Simpson Corporation is calculating their adjusted balance sheet into U.S. Dollars. The exchange…

A: Given: Beginning rate is 1Euro =1$Current exchange rate is 0.8 Euro =1$ Assets =3000 Euros Assets in…

Q: How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento’s 2020 income…

A: a. Here we need to find how does the fluctuation in exchange rates affect Turbo's 2020 income…

Q: A​ U.S.-based multinational company has two​ subsidiaries, one in Mexico​ (local currency,…

A: Effective interest rate : Formula for calculating effective interest rate: Effective interest rate =…