ADVANCED ACCOUNTING-LL
13th Edition
ISBN: 9781260232486
Author: Hoyle
Publisher: MCGRAW-HILL CUSTOM PUBLISHING
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Question
Chapter 10, Problem 30P
a.
To determine
What exchange rate would be used to report in consolidated financial statement when functional currency is kanquo.
b.
To determine
What exchange rate would be used to report in consolidated financial statement when US Dollar functional currency.
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Rolfe 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
NGN
15,120
Notes payable
NGN
20,160
Inventory
10,800
Common stock
20,160
Land
4,080
Retained earnings
10,080
Building
40,800
Accumulated depreciation
(20,400
)
NGN
50,400
NGN
50,400
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:
2020
Feb.
1
Paid 8,080,000 NGN on the note payable.
May
1
Sold entire inventory for 16,800,000 NGN on account.
June
1
Sold land for 6,080,000 NGN cash.
Aug.
1
Collected all accounts receivable.
Sept.
1
Signed long-term note to receive 8,080,000 NGN cash.
Oct.
1
Bought inventory for 20,080,000 NGN cash.
Nov.
1…
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
Rolfe 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
NGN
16,240
Notes payable
NGN
20,180
Inventory
10,900
Common stock
21,000
Land
4,090
Retained earnings
10,500
Building
40,900
Accumulated depreciation
(20,450
)
NGN
51,680
NGN
51,680
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:
2020
Feb.
1
Paid 8,090,000 NGN on the note payable.
May
1
Sold entire inventory for 16,900,000 NGN on account.
June
1
Sold land for 6,090,000 NGN cash.
Aug.
1
Collected all accounts receivable.
Sept.
1
Signed long-term note to receive 8,090,000 NGN cash.
Oct.
1
Bought inventory for 20,090,000 NGN cash.
Nov.
1…
Chapter 10 Solutions
ADVANCED ACCOUNTING-LL
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
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- Rolfe 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 NGN 16,800 Notes payable NGN 20,400 Inventory 12,000 Common stock 22,400 Land 4,200 Retained earnings 11,200 Building 42,000 Accumulated depreciation (21,000 ) NGN 54,000 NGN 54,000arrow_forwardThe following balance sheet accounts of a foreign subsidiary at December 31, 2011, have been translated into U.S. dollars as follows: Translated at Current Rates Historical Rates Accounts receivable, current $ 600,000 $ 660,000 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, 2011, for the above items? Assume the U.S. dotlar is the functional currency $1,300,000 $1.288.000 10:56 EN lenovoarrow_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 NGN 16,000 Notes payable NGN 20,000 Inventory 10,000 Common stock 20,000 Land 4,000 Retained earnings 10,000 Building 40,000 Accumulated depreciation (20,000 ) NGN 50,000 NGN 50,000 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: 2020 Feb. 1 Paid 8,000,000 NGN on the note payable. May 1 Sold entire inventory for 16,000,000 NGN on account. June 1 Sold land for 6,000,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept. 1 Signed long-term note to receive 8,000,000 NGN cash. Oct. 1 Bought inventory for 20,000,000 NGN cash. Nov. 1…arrow_forward
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