Translate the following Balance sheet of XYZ Ltd. Which is an Indian based multinationalcompany doing business in UK using Current rate, Current/Non-current method, and monetarynon-Monetary and temporal method and show the Cumulative translation Adjustment. You arerequired to prepare the Consolidated Balance Sheet under all methods. Assume the Current rate ofexchange INR/GBP as on 31“ December 2018 is 94.1041 and Historical exchange rate GBP/INRas on 1" January 2018 was 0.01063 and average rate is INR/GBP was at 86.2458Balance sheet of XYZ Ltd as on 31 December 2018.(Parent)AssetsAmount in GBPAmount in INRcash at bank7526624658Deferred Tax assets4500373500Receivables from debtors5350444050Derivative financial assets8635716705LicencesLand160001328000260002158000Accrued interest87150010500785116516413Liabilities and EquityPayables to creditorsAccrued expensesCapital lease due545645284816521137124311000913000Share capital455343779322785116516413B.Identify and explain which of the items given in the balance sheet created high impact for CTA.C. Advice the company regarding the steps to be taken by them to reduce the impact of such itemson CTA in future.

Consolidated financial statement is the combined financial statement of the parent and subsidiary…

Answered: Translate the following Balance sheet…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Honesty Company is a Philippine company in Taiwan. Honesty’s functional currency is the Taiwan dollar (TWD). The following exchange rates were in effect during 2022 (see image below).Honesty reported sales of TWD 1,500,000 during 2022 and had accounts receivable of TWD 280,000 as of December 31, 2022. Answer the following subquestions: a. How much is the amount of Accounts Receivable to be included in the consolidated financial statements? b. How much is the amount of Sales to be included in the consolidated financial statements? _______________ thanks!
Choose the correct. Brief, Inc., had a receivable from a foreign customer that is payable in the customer’s local currency. On December 31, 2017, Brief correctly included this receivable for 200,000 local currency units (LCU) in its balance sheet at $110,000. When Brief collected the receivable on February 15, 2018, the U.S. dollar equivalent was $120,000. In Brief’s 2018 consolidated income statement, how much should it report as a foreign exchange gain?a. $–0–b. $10,000c. $15,000d. $25,000
The following balance sheet accounts of a foreign subsidiary at December 31, 2017, have been translated into U.S. dollars as follows: Translated at Current Rates Historical Rates Accounts receivable, current $ 600,000 $ 600,000 Accounts receivable, long-term 300,000 324,000 Inventories carried at market 180,000 198,000 Goodwill 190,000 220,000 $1,270,000 $ 1,402,000 What total should be included in the translated balance sheet at December 31, 2017, for the above items? Assume the U.S. dollar is the functional currency. $1,354,000 $1,270,000 $1,288,000 $1,300,000
Accounting for Business Combinations: Honesty Company accepted a sales order from a Singaporean Company on October 9, 2022. The contract price was S$100,000. The merchandise was delivered on November 19, 2022. The invoice was dated November 15, 2022, FOB Shipping Point. Full payment was received on January 15, 2023. The spot rate for the Singaporean Dollar on the respective dates is as follows (see image below). Answer the follwing subquestions: a. How much is Foreign Exchange Gain (Loss) to be reported in 2022? b. How much is the Sales to be reported in 2022? __________________
Certain balance sheet accounts of a foreign subsidiary of Orchid Company have been stated in U.S. dollars as follows: Current Rates Historical Rates Accounts Receivable, current $200000 $220000 Accounts Receivable, long term 100000 110000 Land 50000 55000 Patents 80000 85000 Total $430000 $470000 This subsidiary’s functional currency is a foreign currency. What total should Orchid’s balance sheet include for the preceding items? Choose the correct.a. $430,000.b. $435,000.c. $440,000.d. $450,000
Explain how a German subsidiary’s year-end balance in retained earnings is expressed in dollars assuming that the euro is the functional currency.
In accordance with U.S. generally accepted accounting principles, which translation combination is appropriate for a foreign operation whose functional currency is the U.S. dollar? Choose the correct option. Method Treatmemt of transition adjustment a. Current rate other comprehensive income b. Current rate Gain or loss in net income c. Temporal other comprehensive income d. Temporal Gain or loss in net income
On November 30, P Corporation purchased inventory from a Chinese supplier. The Chinese company requires payment to be made in Yuan. What exchange rate should be used to value the account payable on the balance sheet? a_ Weighted average exchange rate for the year. B) Exchange rate at the end of the year C) Exchange rate on the settlement date D) Exchange rate on the date of purchase.
Translation of financial statements A U.S.-based MNC has a subsidiary in France (local currency, euro, €). The balance sheet and income statement of the subsidiary follow. Assume that on December 31, 2019, the exchange rate is US$1.20/€. Assume that the local (euro) figures for the statements remain the same on December 31, 2020. Calculate the U.S. dollar-translated figures for the two ending time periods, assuming that between December 31, 2019, and December 31, 2020, the euro has appreciated against the U.S. dollar by 6%.
Assuming that the functional currency of a foreign subsidiary is the local currency, which of the following accounts would be translated at the current rate on the Balance Sheet date (B/S Rate)? a.Additional Paid-In Capital b.Cost of Goods Sold c.Retained Earnings d.Allowance for Doubtful Accounts
From the following, please identify the 2 statements that are true as well as the 2 statements that are false. A) The global integration of capital markets is a major force leading to the convergence of accounting standards. B) Ericsson, the Swedish MNE, was required as of 2005 to adopt both Swedish and U.S. GAAP since it lists it securities in both the U.S. and Sweden. C) When using the current-rate method to translate foreign currency financial statements into the parent currency, translation gains and losses are recognized in comprehensive income. D) The balanced scorecard approach is a preferred method for measuring performance among U.S. firms, but the EU does not allow its usage.
How to translate a foreign subsidiary’s financial statements into its parent’s reporting currency using the current rate method and calculate the related translation adjustment?

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