ADVANCED ACCOUNTING
ADVANCED ACCOUNTING
13th Edition
ISBN: 9781264046263
Author: Hoyle
Publisher: MCG
Question
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Chapter 10, Problem 1DYS

a.

To determine

Identify the location(s) in the annual report that provides disclosures related to the translation of foreign currency financial statements and foreign currency hedging.

b.

To determine

Determine whether the company’s foreign operations have a predominant functional currency.

c.

To determine

Determine the amount of re-measurement gain or loss, if any, reported in net income in each of the three most recent years.

d.

To determine

Determine the amount of translation adjustment, if any, reported in other comprehensive income in each of the three most recent years. Explain the sign (positive or negative) of the translation adjustment in each of the three most recent years.

e.

To determine

Determine whether the company hedges net investments in foreign operations. If so, determine the type(s) of hedging instrument used.

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On September 30, 2020, Peace Frog International (PFI) (a U.S.-based company) negotiated a two- year, 1,600,000 Chinese yuan loan from a Chinese bank at an interest rate of 4 percent per year. The company makes interest payments annually on September 30 and will repay the principal on September 30, 2022. PFI prepares U.S. dollar financial statements and has a December 31 year- end. Relevant exchange rates are as follows: U.S. Dollar per Chinese Yuan ( CNY) $0.160 Date September 30, 2020 December 31, 2020 September 30, 2021 December 31, 2021 September 30, 2022 0.165 0.180 0.185 0.210 a. Prepare all journal entries related to this foreign currency borrowing. b. Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in U.S. dollars on the loan in each of the three years 2020, 2021, and 2022.
On September 30, 2020, Peace Frog International (PFI) (a U.S.-based company) negotiated a two- year, 1,600,000 Chinese yuan loan from a Chinese bank at an interest rate of 4 percent per year. The company makes interest payments annually on September 30 and will repay the principal on September 30, 2022. PFI prepares U.S. dollar financial statements and has a December 31 year- end. Relevant exchange rates are as follows: U.S. Dollar per Chinese Yuan ( CNY) $0.160 Date September 30, 2020 December 31, 2020 September 30, 2021 December 31, 2021 September 30, 2022 0.165 0.180 0.185 0.210 a. Prepare all journal entries related to this foreign currency borrowing. b. Taking the exchange rate effect on the cost of borrowing into consideration, determine the effective interest rate in U.S. dollars on the loan in each of the three years 2020, 2021, and 2022.
PROBLEM 1: You obtained the following information on the current account of BUGOY CORP. During your examination of its financial statements for the year ended December 31, 2021. The bank statement on November 30, 2021 showed a balance of P918,000. Among the bank credits in November was customer's note for P300,000 collected for the account of the company which the company recognized in December among its receipts. Included in the bank debits were cost of checkbooks amounting to P3,600 and a P120,000 check which was charged by the bank in error against Bugoy's account. Also in November you ascertained that there were deposits in transit amounting to P240,000 and outstanding checks totaling P510,000. The bank statement for the month of December showed total credits of P1,248,000 and total charges of P612,000. The Company's books for December showed total debits of P2,206,800, total credits of P1,221,600 and a balance of P1,456,800. Bank debit memos for December were: No. 121 for service…
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