ADVANCED FINANCIAL ACCOUNTING IA
12th Edition
ISBN: 9781260545081
Author: Christensen
Publisher: MCG
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Question
Chapter 12, Problem 12.33P
(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.
A proof of the translation adjustment.
(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.
Whether U.S dollar strengthened or weakened against the local currency unit (MXP) during the year.
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Journal entries for an account payable denominated in Mexican Pesos ($US weakens and strengthens)
Assume that your company purchases inventories from a Mexican supplier on December 15. The invoice specifies that payment is to be made on March 15 in Mexican Pesos (Peso) in the amount of 350,000
Pesos. Your company operates on a calendar year basis.
Assume the following exchange rates:
December 15 $0.046:1 Peso
December 31 $0.053:1 Peso
March 15
$0.050:1 Peso
Prepare the journal entries to record the purchase (assume perpetual inventory accounting), the required adjusting entry at December 31, and the payment on March 15.
General Journal
Date
Description
Debit
Credit
Accounts payable
Accounts payable
Dec 15 Inventory
Dec 31 Foreign currency transaction loss
Mar 15 Accounts payable
÷
16,100
0
0
16,100
2,450
0
0
2,450
28,000 ×
0
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0
10,500 x
Cash
0
17,500
Tristan Narvaja, S.A. (A). Tristan Narvaja, S.A., is the Uruguayan subsidiary of a U.S. manufacturing company. Its balance sheet for January 1 is shown in the
popup window, E. The January 1 exchange rate between the U.S. dollar and the peso Uruguayo ($U) is $U24/$. Determine Tristan Narvaja's contribution to the
translation exposure of its parent on January 1, using the current rate method.
a. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1st, using the current rate method.
b. Calculate Tristan Narvaja's contribution to its parent's translation loss if the exchange rate on December 31st is $U24/$. Assume all peso Uruguayo accounts
remain as they were at the beginning of the year.
a. Using the current rate method, what is Tristan Narvaja's contribution to the translation exposure of its parent on January 1st?
$U
(Round to the nearest peso Uruguayo.)
A company has an account payable to a U.S. company, a supplier of inventory, in the amount of US$
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?
Chapter 12 Solutions
ADVANCED FINANCIAL ACCOUNTING IA
Ch. 12 - Prob. 12.1QCh. 12 - Prob. 12.2QCh. 12 - Prob. 12.3QCh. 12 - How widely used are IFRS? Can IFRS be used for...Ch. 12 - Prob. 12.5QCh. 12 - Prob. 12.6QCh. 12 - Prob. 12.7QCh. 12 - Prob. 12.8QCh. 12 - Prob. 12.9QCh. 12 - Prob. 12.10Q
Ch. 12 - Prob. 12.11QCh. 12 - Prob. 12.12QCh. 12 - Prob. 12.13QCh. 12 - Prob. 12.14QCh. 12 - Prob. 12.15QCh. 12 - Prob. 12.16QCh. 12 - Prob. 12.17QCh. 12 - Prob. 12.18QCh. 12 - Prob. 12.19QCh. 12 - Prob. 12.20QCh. 12 - Prob. 12.4CCh. 12 - Prob. 12.5CCh. 12 - Prob. 12.6CCh. 12 - Prob. 12.7CCh. 12 - Prob. 12.1.1ECh. 12 - Prob. 12.1.2ECh. 12 - Prob. 12.1.3ECh. 12 - Prob. 12.1.4ECh. 12 - Prob. 12.1.5ECh. 12 - Prob. 12.1.6ECh. 12 - Prob. 12.1.7ECh. 12 - Prob. 12.2.1ECh. 12 - Prob. 12.2.2ECh. 12 - Prob. 12.2.3ECh. 12 - Prob. 12.2.4ECh. 12 - Prob. 12.2.5ECh. 12 - Prob. 12.2.6ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4.1ECh. 12 - Prob. 12.4.2ECh. 12 - Prob. 12.4.3ECh. 12 - Prob. 12.4.4ECh. 12 - Prob. 12.4.5ECh. 12 - Prob. 12.4.6ECh. 12 - Prob. 12.4.7ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Prob. 12.9ECh. 12 - Prob. 12.10ECh. 12 - Prob. 12.11ECh. 12 - Prob. 12.12ECh. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Prob. 12.15ECh. 12 - Prob. 12.16PCh. 12 - Prob. 12.17PCh. 12 - Prob. 12.18PCh. 12 - Prob. 12.19PCh. 12 - Remeasurement Gain or Loss Refer to the...Ch. 12 - Prob. 12.21PCh. 12 - Remeasurement and Proof of Remeasurement Gain or...Ch. 12 - Translation Palermo Inc. purchased 80 percent of...Ch. 12 - Prob. 12.24PCh. 12 - Prob. 12.25PCh. 12 - Prob. 12.26PCh. 12 - Prob. 12.27PCh. 12 - Prob. 12.28PCh. 12 - Prob. 12.29PCh. 12 - Prob. 12.30PCh. 12 - Prob. 12.31PCh. 12 - Prob. 12.32PCh. 12 - Prob. 12.33P
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