Here is given a balance sheet of a North Macedonian subsidiary of a US parent company. Calculatetranslation gain or loss under current rate method if the exchange rate changes from 50 denar/US.dollar to 60 denar/U.S. dollar? (H denotes historical exchange rate, C denotes current exchangerate). Since Cumulative Translation Adjustment (CTA) Account is not zero at the beginning, youhave also to calculate it before the devaluation happens.Balance SheetBefore DevaluationExchange Rate(MKD) (MKD/USS)After DevaluationExchange Rate(MKD/USS)AssetsМаccdonianDenarStatementMKD 27,000,000TranslatedTranslatedАссountsАссountsUS DollarsUS Dollars49.00 (H)50.00 (C)48.00 (H)50.00 (C)49.00 (H)60.00 (C)48.00 (H)60.00 (C)CashАссounts151,200,000Receivable45.00 (H)50.00 (C)40.00 (H)50.00 (C)45.00 (H)60.00 (C)40.00 (H)60.00 (C)Inventory43,200,000Net Plant and86,400,000EquipmentTntalMKD 307,800,000Liabilities &Net WorthАссounts48.50 (H)50.00 (C)47.50 (H)48.50 (H)60.00 (C)47.50 (H)60.00 (C)31.25 (H)60.00 (C)37.50 (H)MKD 37,800,000PayableBank Loans108,000,00050.00 (C)31.25 (H)50.00 (C)37.50 (H)50.00 (C)Common Stock60,000,000Retained102,000,000Earnings60.00 (C)CumulativeTranslationAdjustmentAccount (Loss)TntalMKD 307,800,000Instead, the translation gain(loss) arising from the fall in the value of Macedonian Denar can be calculated as follows:Net Exnosed Assets (US S)Percentage Change in the Value of Macedonian DenarIncrease in Translation Gain (Loss) after Devaluation of the Macedonian Denar

Translation is an accounting process to report business of foreign subsidiaries into domestic…

Here is given a balance sheet of a North Macedonian subsidiary of a US parent company. Calculate translation gain or loss under current rate method if the exchange rate changes from 50 denar/US. dollar to 60 denar/U.S. dollar? (H denotes historical exchange rate, C denotes current exchange rate). Since Cumulative Translation Adjustment (CTA) Account is not zero at the beginning. you have also to calculate it before the devaluation happens. Balance Sheet Macedonian (MKD) Before Devaluation Exchange Rate (MKD/USS) After Devaluation Exchange Rate (MKD/USS) Assets Translated Translated Denar Accounts Accounts US Dollars US Dollars Statement MKD 27,000,000 49.00 (H) 50.00 (C) 48.00 (H) 50.00 (C) 49.00 (H) 60.00 (C) 48.00 (H) 60.00 (C) Cash Accounts 151,200,000 Receivable 45.00 (H) 50.00 (C) 40.00 (H) 50.00 (C) Inventory 43,200,000 45.00 (H) 60.00 (C) 40.00 (H) 60.00 (C) Net Plant and 86,400,000 Equipment Total MKD 307,800,000 Liabilities & Net Worth 48.50 (H) 60.00 (C) 47.50 (H) 60.00 (C) Accounts MKD 37,800,000 48.50 (H) 50.00 (C) 47.50 (H) 50.00 (C) 31.25 (H) 50.00 (C) Payable Bank Loans 108,000,000 60,000,000 31.25 (H) 60.00 (C) Common Stock 37.50 (H) 50.00 (C) 37.50 (H) 60.00 (C) Retained 102,000,000 Earnings Cumulative Translation Adjustment Account (Loss) Total MKD 307,800,000 Instead, the translation gain(loss) arising from the fall in the value of Macedonian Denar can be calculated as follows: Net Exposed Assets (US $) Percentage Change in the Value of Macedonian Denar Increase in Translation Gain (Loss) after Devaluation of the Macedonian Denar

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

ChapterP2: Part 2: Exchange Rate Behavior

Section: Chapter Questions

Problem 1Q