Lancer, Inc. (a U.S.-based company) establishes a subsidiary in a foreign country on January 1, 2016. The following account balances for the year ending December 31, 2017, are stated in kanquo (KQ), the local currency: Sales KQ 250,000 Inventory (bought on 3/1/17) 150,000 Equipment (bought on 1/1/16) 70,000 Rent expense 16,000 Dividends (declared on 10/1/17) 24,000 Notes receivable (to be collected in 2020) 41,000 Accumulated depreciation—equipment 21,000 Salary payable 6,000 Depreciation expense 7,000 The following U.S.$ per KQ exchange rates are applicable: January 1, 2016 $0.24 Average for 2016 0.25 January 1, 2017 0.29 March 1, 2017 0.30 October 1, 2017 0.32 December 31, 2017 0.33 Average for 2017 0.31 Lancer is preparing account balances to produce consolidated financial statements. Assuming that the kanquo is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? Assuming that the U.S. dollar is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? (Round your answers to 2 decimal places.) Lancer, Inc. (a U.S.-based company), establishes a subsidiary in a foreign country on January 1, 2016. The following account balances for the year ending December 31, 2017, are stated in kanquo (KQ), the local currency: Sales KQ 250,000 Inventory (bought on 3/1/17) 150,000 Equipment (bought on 1/1/16) 70,000 Rent expense 16,000 Dividends (declared on 10/1/17) 24,000 Notes receivable (to be collected in 2020) 41,000 Accumulated depreciation—equipment 21,000 Salary payable 6,000 Depreciation expense 7,000 The following U.S.$ per KQ exchange rates are applicable: January 1, 2016 $0.24 Average for 2016 0.25 January 1, 2017 0.29 March 1, 2017 0.30 October 1, 2017 0.32 December 31, 2017 0.33 Average for 2017 0.31 Lancer is preparing account balances to produce consolidated financial statements. Assuming that the kanquo is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? Assuming that the U.S. dollar is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? (Round your answers to 2 decimal places.) Account Exchange Rate a. Sales Inventory Equipment Rent expense Dividends Notes receivable Accumulated depreciation-equipment Salary payable Depreciation expense b. Sales Inventory Equipment Rent expense Dividends Notes receivable Accumulated depreciation-equipment Salary payable Depreciation expense
Lancer, Inc. (a U.S.-based company) establishes a subsidiary in a foreign country on January 1, 2016. The following account balances for the year ending December 31, 2017, are stated in kanquo (KQ), the local currency: Sales KQ 250,000 Inventory (bought on 3/1/17) 150,000 Equipment (bought on 1/1/16) 70,000 Rent expense 16,000 Dividends (declared on 10/1/17) 24,000 Notes receivable (to be collected in 2020) 41,000 Accumulated depreciation—equipment 21,000 Salary payable 6,000 Depreciation expense 7,000 The following U.S.$ per KQ exchange rates are applicable: January 1, 2016 $0.24 Average for 2016 0.25 January 1, 2017 0.29 March 1, 2017 0.30 October 1, 2017 0.32 December 31, 2017 0.33 Average for 2017 0.31 Lancer is preparing account balances to produce consolidated financial statements. Assuming that the kanquo is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? Assuming that the U.S. dollar is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? (Round your answers to 2 decimal places.) Lancer, Inc. (a U.S.-based company), establishes a subsidiary in a foreign country on January 1, 2016. The following account balances for the year ending December 31, 2017, are stated in kanquo (KQ), the local currency: Sales KQ 250,000 Inventory (bought on 3/1/17) 150,000 Equipment (bought on 1/1/16) 70,000 Rent expense 16,000 Dividends (declared on 10/1/17) 24,000 Notes receivable (to be collected in 2020) 41,000 Accumulated depreciation—equipment 21,000 Salary payable 6,000 Depreciation expense 7,000 The following U.S.$ per KQ exchange rates are applicable: January 1, 2016 $0.24 Average for 2016 0.25 January 1, 2017 0.29 March 1, 2017 0.30 October 1, 2017 0.32 December 31, 2017 0.33 Average for 2017 0.31 Lancer is preparing account balances to produce consolidated financial statements. Assuming that the kanquo is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? Assuming that the U.S. dollar is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? (Round your answers to 2 decimal places.) Account Exchange Rate a. Sales Inventory Equipment Rent expense Dividends Notes receivable Accumulated depreciation-equipment Salary payable Depreciation expense b. Sales Inventory Equipment Rent expense Dividends Notes receivable Accumulated depreciation-equipment Salary payable Depreciation expense
Chapter9: Taxation Of International Transactions
Section: Chapter Questions
Problem 27P
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Lancer, Inc. (a U.S.-based company) establishes a subsidiary in a foreign country on January 1, 2016. The following account balances for the year ending December 31, 2017, are stated in kanquo (KQ), the local currency:
| Sales | KQ | 250,000 |
| Inventory (bought on 3/1/17) | 150,000 | |
| Equipment (bought on 1/1/16) | 70,000 | |
| Rent expense | 16,000 | |
| Dividends (declared on 10/1/17) | 24,000 | |
| Notes receivable (to be collected in 2020) | 41,000 | |
| 21,000 | ||
| Salary payable | 6,000 | |
| Depreciation expense | 7,000 | |
The following U.S.$ per KQ exchange rates are applicable:
| January 1, 2016 | $0.24 |
| Average for 2016 | 0.25 |
| January 1, 2017 | 0.29 |
| March 1, 2017 | 0.30 |
| October 1, 2017 | 0.32 |
| December 31, 2017 | 0.33 |
| Average for 2017 | 0.31 |
Lancer is preparing account balances to produce consolidated financial statements.
-
Assuming that the kanquo is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements?
-
Assuming that the U.S. dollar is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements?
(Round your answers to 2 decimal places.)
Lancer, Inc. (a U.S.-based company), establishes a subsidiary in a foreign country on January 1, 2016. The following account balances for the year ending December 31, 2017, are stated in kanquo (KQ), the local currency:
| Sales | KQ | 250,000 |
| Inventory (bought on 3/1/17) | 150,000 | |
| Equipment (bought on 1/1/16) | 70,000 | |
| Rent expense | 16,000 | |
| Dividends (declared on 10/1/17) | 24,000 | |
| Notes receivable (to be collected in 2020) | 41,000 | |
| Accumulated depreciation—equipment | 21,000 | |
| Salary payable | 6,000 | |
| Depreciation expense | 7,000 | |
The following U.S.$ per KQ exchange rates are applicable:
| January 1, 2016 | $0.24 |
| Average for 2016 | 0.25 |
| January 1, 2017 | 0.29 |
| March 1, 2017 | 0.30 |
| October 1, 2017 | 0.32 |
| December 31, 2017 | 0.33 |
| Average for 2017 | 0.31 |
Lancer is preparing account balances to produce consolidated financial statements.
-
Assuming that the kanquo is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements?
-
Assuming that the U.S. dollar is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements?
(Round your answers to 2 decimal places.)
| Account | Exchange Rate | |
| a. | Sales | |
| Inventory | ||
| Equipment | ||
| Rent expense | ||
| Dividends | ||
| Notes receivable | ||
| Accumulated depreciation-equipment | ||
| Salary payable | ||
| Depreciation expense | ||
| b. | Sales | |
| Inventory | ||
| Equipment | ||
| Rent expense | ||
| Dividends | ||
| Notes receivable | ||
| Accumulated depreciation-equipment | ||
| Salary payable | ||
| Depreciation expense |
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