ADVANCED ACCOUNTING(LL) W/CONNECT
13th Edition
ISBN: 9781260282382
Author: Hoyle
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 12P
To determine
Identify the appropriate answer for the given statement from the given choices.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
A U.S. company’s foreign subsidiary had these amounts in local currency units (LCU) in 2017:
Cost of goods sold
LCU
5,810,000
Beginning inventory
541,000
Ending inventory
624,000
The average exchange rate during 2017 was $1.40 = LCU 1. The beginning inventory was acquired when the exchange rate was $1.20 = LCU 1. Ending inventory was acquired when the exchange rate was $1.50 = LCU 1. The exchange rate at December 31, 2017, was $1.55 = LCU 1. Assuming that the foreign country is highly inflationary, at what amount should the foreign subsidiary’s cost of goods sold be reflected in the U.S. dollar income statement?
X Corp. reported the following data for 2017. Total net sales – P4,000,000; Goods purchased – P2,400,000; Beginning Inventory – P400,000; Ending Inventory – P600,000; 1 year advance rent of 60,000 to apply for 2018; P80,000 total interest income from customers promissory note earned. P60,000 of this was collected.; Unrealized foreign exchange gains from foreign currency receivables – P120,000; Using cash basis, compute the total income subject to income tax.
A U.S. company's foreign subsidiary had the following amounts in stickles (5), the functional currency, in 2018:
Cost of goods sold
$12,000, e00
Ending inventory
Beginning inventory
600,000
240,000
The average exchange rate during 2018 was 81 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90.
The exchange rate at December 31, 2018 was §1= $.84. Assuming that the foreign nation for the subsidiary had a highly inflationary economy, at what amount should that foreign subsidiary's purchases have
been reflected in the 2018 U.S. dollar income statement?
Multiple Cholce
$11,865,600.
$11.577,600.
$11.520.000.
$11,613,600.
$11,523,600.
Chapter 10 Solutions
ADVANCED ACCOUNTING(LL) W/CONNECT
Ch. 10 - Prob. 1QCh. 10 - What causes balance sheet (or translation)...Ch. 10 - Prob. 3QCh. 10 - Prob. 4QCh. 10 - Prob. 5QCh. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - Prob. 8QCh. 10 - Prob. 9QCh. 10 - Prob. 10Q
Ch. 10 - Prob. 11QCh. 10 - Which translation method does U.S. GAAP require...Ch. 10 - Prob. 13QCh. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - What amount does Newberrys consolidated income...Ch. 10 - Prob. 10PCh. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Prob. 17PCh. 10 - A foreign subsidiarys functional currency is its...Ch. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - The following accounts are denominated in rubles...Ch. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Sullivans Island Company began operating a...Ch. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 33PCh. 10 - The following account balances are for the Agee...Ch. 10 - Prob. 35PCh. 10 - Prob. 36PCh. 10 - Prob. 37PCh. 10 - Prob. 38PCh. 10 - Prob. 1DYSCh. 10 - RESEARCH CASE 2FOREIGN CURRENCY TRANSLATION...Ch. 10 - Prob. 3DYSCh. 10 - Prob. 4DYSCh. 10 - Prob. 5DYS
Knowledge Booster
Similar questions
- A company has an account payable to a U.S. company, a supplier of inventory, in the amount of US$ 170,000. The payable was incurred when the exchange rate was US$1 = Cdn$0.79. At year - end, the rate is $0.75. Required: 1. What amount of inventory is recorded? 2. What amount of exchange gain or loss will the company report for the year?arrow_forwardA company has an account payable to a U.S. company, a supplier of inventory, in the amount of US$250,000. The payable was incurred when the exchange rate was US$1 = Cdn$0.82. At year-end, the rate is $0.79. Required: 1. What amount of inventory is recorded? Amount of inventory 2. What amount of exchange gain or loss will the company report for the year? Amount of exchange gain or losarrow_forwardThe 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 $1,300,000arrow_forward
- Rabato Corporation acquired merchandise on account from foreign supplier on November 1, 2015, for 60,000 LCU (local currency units). It paid the foreign currency account payable on January 15, 2016. The following exchange rates for 1 LCU are known: December 1, 2015 $0.345, December 31, 2015 $0.333 and January 1, 2016 $0.359. How does the fluctuation in exchange rates affect Rabato's 2015 income statement? How does the fluctuation in exchange rates affect Rabato's 2016 income statement?arrow_forwardVoltac Corporation (a U.S. company located in Charlotte, North Carolina) has the following import/ export transactions denominated in Mexican pesos in 2017:Currency exchange rates for 1 peso for 2017 are as follows:For each of the following accounts, how much will Voltac report on its 2017 financial statements?a. Inventory.b. Cost of Goods Sold.c. Sales.d. Accounts Receivable.e. Accounts Payable.f. Cash.arrow_forwardRolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s): Cash Inventory Land Building Accumulated depreciation 2011 2013 August 1, 2019 December 31, 2019 February 1, 2020 May 1, 2020 June 1, 2020 August 1, 2020 September 1, 2020 NGN 16,790 Notes payable Common stock Retained. 11,900 earnings The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During 2020, the following transactions took place: October 1, 2020 November 1, 2020 December 1, 2020 December 31, 2020 Average for 2020 4,190 41,900 (20,950) NGN 53,830 2020 Feb. 1 Paid 8,190,000 NGN on the note payable. May 1 Sold entire inventory for 17,900,000 NGN on account. June 1 Sold land for 6,190,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept. 1 Signed long-term note to receive 8,190,000 NGN…arrow_forward
- A U.S. company's foreign subsidiary had these amounts in local currency units (LCU) in 2024: Cost of goods sold Beginning inventory Ending inventory LCU 5,710,000 542,000 623,000 The average exchange rate during 2024 was $1.20=LCU 1. The beginning inventory was acquired when the exchange rate was $1.00=LCU 1. Ending inventory was acquired when the exchange rate was $1.30 = LCU 1. The exchange rate on December 31, 2024, was $1.35=LCU 1. Required: Assuming that the foreign country is highly inflationary, determine the amount at which the foreign subsidiary's cost of goods sold should be reflected in the U.S. dollar income statement. Cost of goods soldarrow_forwardA U.S. company's foreign subsidiary had these amounts in local currency units (LCU) in 2024: Cost of goods sold Beginning inventory Ending inventory LCU 5,230,000 536,000 622,000 The average exchange rate during 2024 was $1.30 = LCU 1. The beginning inventory was acquired when the exchange rate was $1.10 = LCU 1. Ending inventory was acquired when the exchange rate was $1.40 LCU 1. The exchange rate on December 31, 2024, was $1.45 = LCU 1. Required: Assuming that the foreign country is highly inflationary, determine the amount at which the foreign subsidiary's cost of goods sold should be reflected in the U.S. dollar income statement. Cost of goods soldarrow_forwardOn 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.arrow_forward
- 85 The following tables show the value (in billims of dollars) of U.S. inkernational trade in goods nd services for the 2004-2006. years |mports Goods Exports Goods Servies Sezvices 34.7 147.1 292.2 2004 807.5 2005 894.6 388.4 IC81.8 315.7 2006 l013.1 422.6 1861.3 342.8 Let 'E be a 312 matrix vepresenting the export data, and let 'm’be a similar matrix for the import data. Find each of the fallowing matries land indicate what information each provides, a) E-Marrow_forwardTranslate the foreign currency financial statements below using the current rate (functional) method. Assume the company was incorporated, began business, and became subsidiary of an US firm on January 1, 2016, and the foreign currency was the functional currency. Date January 1, 2016 January 1, 2019 March 31, 2019 Rate 1 FC=$0.10 1 FC=$0.20 1 FC=$0.25 1 FC=$0.40 1 FC=$0.30 December 31, 2019 Weighted average for 2019 Financial Statements of Street Corporation for the year ended December 31, 2019 FC Rate Dollars Income Statement Net sales Costs and expenses Net income 10,000,000 8,000,000 2,000,000 Statement of Retained Earnings Beginning retained earnings 8,000,000 2,000,000 10,000,000 1,000,000 9,000,000 1,600,000 Net income Subtotal Dividends (declared March 31) Ending retained earnings Balance Sheet Assets Current assets Fixed assets (acquired 1/1/2016) Total assets 13,000,000 82,000,000 95,000,000 Liabilities and stockholders' equity Current liabilities |Long-term debt |Common…arrow_forwardASSUME THAT THE LOCAL CURRENCY UNIT IS THE FUNCTIONAL CURRENCY. Cade Inc. had a debit adjustment of $6400 for the year ended December 31, 2019, from restating its foreign subsidiary's accounts from their local currency units into U.S. dollars. Additionally, Cade had a receivable from a foreign customer. It is denominated in the customer's local currency. On December 31, 2018, this receivable for 300,000 local currency units (LCU) was correctly included in Cade's balance sheet at $121000. When the receivable was collected on February 15, 2019, the U.S. dollar-equivalent was $123800. In Cade's 2019 consolidated statement of income, how much should be reported as foreign exchange gain/(loss) in computing net income? BE SURE TO TYPE A SIMPLE NUMBER WITH NO COMMAS OR DOLLAR SIGNS. FOR EXAMPLE, TYPE 1000 INSTEAD OF $1,000. IF THE NUMBER IS NEGATIVE, TYPE -1000 INSTEAD OF ($1,000) Your Answer:arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education