Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company. Re-measurement: It is process to measure the financial results of any other currency into functional currency. Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock. The re-measurement of cost of goods sold for the year 20X7 assuming U.S dollar is the functional currency.

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Answer 1

Question

Chapter 12, Problem 12.11E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The re-measurement of cost of goods sold for the year 20X7 assuming U.S dollar is the functional currency.

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The translation of cost of goods sold for 20X7 assuming euro as the functional currency.

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E12-11 Remeasurement and Translation of Cost of Goods Sold Duff Company is a subsidiary of Rand Corporation and is located in Madrid, Spain, where the cur- rency is the euro (€). Data on Duff's inventory and purchases are as follows: Inventory, January 1, 20X7 Purchases during 20X7 Inventory, December 31, 20X7 €220,000 846,000 180,000 The beginning inventory was acquired during the fourth quarter of 20X6, and the ending inven- tory was acquired during the fourth quarter of 20X7. Purchases were made evenly over the year. Exchange rates were as follows: 24 1 = 1.29015 Fourth quarter of 20X6 January 1, 20X7 Average during 20X7 Fourth quarter of 20X7 December 31, 20X7 1 = 1.32030 1 = 1.39655 1 = 1.45000 1 = 1.47280 Required a. Show the remeasurement of cost of goods sold for 20X7, assuming that the U.S. dollar is the functional currency. b. Show the translation of cost of goods sold for 20X7, assuming that the euro is the functional currency.

Stuff Company is a subsidiary of Pland Corporation and is located in Madrid, Spain, where the currency is the euro (€). Data on Stuff’s inventory and purchases are as follows: Inventory, January 1, 20X7 € 230,000 Purchases during 20X7 858,000 Inventory, December 31, 20X7 183,000 The beginning inventory was acquired during the fourth quarter of 20X6, and the ending inventory was acquired during the fourth quarter of 20X7. Purchases were made evenly over the year. Exchange rates were as follows: Fourth quarter of 20X6 € 1 = $ 1.29015 January 1, 20X7 € 1 = $ 1.32030 Average during 20X7 € 1 = $ 1.39655 Fourth quarter of 20X7 € 1 = $ 1.45000 December 31, 20X7 € 1 = $ 1.47280 Required: Show the remeasurement of cost of goods sold for 20X7, assuming that the U.S. dollar is the functional currency. Note: Round your intermediate calculations and final answer to nearest dollar amount. Show the translation of cost of goods sold for 20X7, assuming that the euro is the…

, Stuff Company is a subsidiary of Pland Corporation and is located in Madrid, Spain, where the currency is the euro (€). Data on Stuff's Inventory and purchases are as follows: Book int erences Inventory, January 1, 20x71 Purchases during 2007 Inventory, December 31, 20x7 €224,000 849,000 188,000 The beginning inventory was acquired during the fourth quarter of 20X6, and the ending inventory was acquired during the fourth quarter of 20X7. Purchases were made evenly over the year. Exchange rates were as follows: Fourth quarter of 20x6 1-1.29015 January 1, 20x7 1-1.320301 Average during 20x7 1-1.39655 Fourth quarter of 2007 1-1.45000 December 31, 20x7 1-1.47280

Answer 2

Question

Chapter 12, Problem 12.11E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The re-measurement of cost of goods sold for the year 20X7 assuming U.S dollar is the functional currency.

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The translation of cost of goods sold for 20X7 assuming euro as the functional currency.

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Answer 3

Question

Chapter 12, Problem 12.11E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The re-measurement of cost of goods sold for the year 20X7 assuming U.S dollar is the functional currency.

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The translation of cost of goods sold for 20X7 assuming euro as the functional currency.

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Answer 4

Question

Chapter 12, Problem 12.11E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The re-measurement of cost of goods sold for the year 20X7 assuming U.S dollar is the functional currency.

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The translation of cost of goods sold for 20X7 assuming euro as the functional currency.

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Answer 5

Chapter 12, Problem 12.11E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The re-measurement of cost of goods sold for the year 20X7 assuming U.S dollar is the functional currency.

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The translation of cost of goods sold for 20X7 assuming euro as the functional currency.

Answer 6

Chapter 12, Problem 12.11E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The re-measurement of cost of goods sold for the year 20X7 assuming U.S dollar is the functional currency.

Answer 7

Chapter 12, Problem 12.11E

(a)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The re-measurement of cost of goods sold for the year 20X7 assuming U.S dollar is the functional currency.

Answer 8

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The translation of cost of goods sold for 20X7 assuming euro as the functional currency.

Answer 9

(b)

To determine

Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.

Re-measurement: It is process to measure the financial results of any other currency into functional currency.

Cost of goods sold: It the value of the goods which is sold during the year. It the basic cost of the goods without profit element. It is calculated by adding opening stock and purchases during the year and subtracting the result by closing stock.

The translation of cost of goods sold for 20X7 assuming euro as the functional currency.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 12 - Prob. 12.1Q Ch. 12 - Prob. 12.2Q Ch. 12 - Prob. 12.3Q Ch. 12 - How widely used are IFRS? Can IFRS be used for...Ch. 12 - Prob. 12.5Q Ch. 12 - Prob. 12.6Q Ch. 12 - Prob. 12.7Q Ch. 12 - Prob. 12.8Q Ch. 12 - Prob. 12.9Q Ch. 12 - Prob. 12.10Q

Solution Summary: The author explains how translation is used to convert financial results of the business of subsidiary company into the functional currency of parent company.

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