FUNDAMENTALS OF ADVANCED ACCOUNTING >I
6th Edition
ISBN: 9781307007350
Author: Hoyle
Publisher: MCG/CREATE
expand_more
expand_more
format_list_bulleted
Question
Chapter 8, 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.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
I.
A. Prepare all entries on the Phil. firm’s books to record the above transactions
B. Determine the following:
Foreign exchange gain or loss on:i. December 1, 20x4ii. December 31, 20x4iii. March 1, 20x5
On December 31, 20x4:i. Accounts payableii. Inventory
Part 2
REQUIRED: Translate (translation working paper) the financial statements of GoldCorporation into the presentation currency which is Philippine peso.
Balance-of-payments double-entry bookkeeping. Show how the following transactions should be recorded in the U.S. balance of payments using a double-entry accounting system:
■ Newmont Mining—a U.S. mining concern—exports $400 million worth of copper to China and is paid in the form of a payment drawn on a U.S. bank.
■ DuPont expands its plastics manufacturing capacity in its Polish plant by investing $250 million financed by a dollar bond issue in London (United Kingdom).
■ The central bank of the People’s Bank of China purchases $2.5 billion in the foreign exchange market to slow down the appreciation of the renmimbi. The dollars are invested in five-year U.S. Treasury bonds.
■ The U.S. government provides food assistance to Sudanese refugees in the amount of $25 million worth of flour.
Your business subsidiary in Brunei reports their financial information with their local currency (Brunei Dollar)(BND). The information is reported in Table 1. Translate the financial information of your Brunei subsidiary using the Current/Non-Current method, and Monetary / Non-Monetary Method. The Current/Spot Rate is BND 1 equal to MYR 3. The historical rate is BND 1 equal to MYR 3.5
Table 1 Financial Information from Subsidiary in Brunei
Cash
$2,500
Deposit in Bank
$1,050
Inventory
$5,000
Account Receivables
$3,500
Building
$51,000
Equipment
$38,000
Intangible Assets
$10,300
Account Payable
$4,800
Short-term Bank Loans
$15,000
Long Term Debt
$56,000
Sales
$70,000
COGS
$78,321
Chapter 8 Solutions
FUNDAMENTALS OF ADVANCED ACCOUNTING >I
Ch. 8 - Prob. 1QCh. 8 - What causes balance sheet (or translation)...Ch. 8 - Prob. 3QCh. 8 - Prob. 4QCh. 8 - Prob. 5QCh. 8 - Prob. 6QCh. 8 - Prob. 7QCh. 8 - Prob. 8QCh. 8 - Prob. 9QCh. 8 - Prob. 10Q
Ch. 8 - Prob. 11QCh. 8 - Which translation method does U.S. GAAP require...Ch. 8 - Prob. 13QCh. 8 - Prob. 1PCh. 8 - Prob. 2PCh. 8 - Prob. 3PCh. 8 - Prob. 4PCh. 8 - Prob. 5PCh. 8 - Prob. 6PCh. 8 - Prob. 7PCh. 8 - Prob. 8PCh. 8 - Prob. 9PCh. 8 - Prob. 10PCh. 8 - Prob. 11PCh. 8 - Prob. 12PCh. 8 - Prob. 13PCh. 8 - Prob. 14PCh. 8 - Prob. 15PCh. 8 - Prob. 16PCh. 8 - Prob. 17PCh. 8 - A foreign subsidiarys functional currency is its...Ch. 8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 1DYSCh. 8 - Prob. 2DYSCh. 8 - Prob. 3DYSCh. 8 - Prob. 4DYSCh. 8 - Prob. 5DYS
Knowledge Booster
Similar questions
- Question Exchanging dollars for euros to pay a computer manufacturer in Belgium would occur Answer at the European Central Bank. at the Federal Reserve. in the letter of credit market. in the foreign exchange market.arrow_forwardThe question relates to either Chapter 9 ( Foreign Currency Translations and Hedging Foreign Exchange Risk ) or Chapter 10 ( Translation of Foreign Currency Financial Statements ) For Advanced Accounting 13th Edition by Joe B. Hoyle, Thomas F, Schaefer, and Timothy S. Doupnik. Details are included in the image Need all calculations, journal entries, work, etc.arrow_forwardonly answer question 4 please Yardi Solutions is a multinational company base in the Caribbean, which trades with 3 countries out the north America, what are some issues related to foreign exchange management. address the following issues The form of MNC that the business takes, whether franchising, licensing, the exportation of a product sold through a distributor, etc. The rationale behind using this form of MNC should also be given. The main foreign currencies that will be used in the business. The foreign exchange exposure of the company and how the company plans to manage this exposure. Any current financial issues that affect the operating environment of the MNC and how these issues affect the company’s foreign currency exposure. answer question #4 the Caribbean country is Jamaica type of business is electronics currency us, GBP & euro Type of MNC - Tech Industry- service and product, name of the company is YardieTech Solutions specializes in technology, services…arrow_forward
- Lancer, Inc. (a U.S.-based company) establishes a subsidiary in a foreign country on January 1, 2016. The following account balances for the year ending December 31, 2017, are stated in kanquo (KQ), the local currency: Sales KQ 250,000 Inventory (bought on 3/1/17) 150,000 Equipment (bought on 1/1/16) 70,000 Rent expense 16,000 Dividends (declared on 10/1/17) 24,000 Notes receivable (to be collected in 2020) 41,000 Accumulated depreciation—equipment 21,000 Salary payable 6,000 Depreciation expense 7,000 The following U.S.$ per KQ exchange rates are applicable: January 1, 2016 $0.24 Average for 2016 0.25 January 1, 2017 0.29 March 1, 2017 0.30 October 1, 2017 0.32 December 31, 2017 0.33 Average for 2017 0.31 Lancer is preparing account balances to produce consolidated financial statements. Assuming that the kanquo is the functional currency, what exchange rate would be used to report each of these…arrow_forwardAccounting for Business Combinations Honesty Company placed a purchase order to a Singaporean Company on October 9, 2022. The contract price was S$150,000. The merchandise was delivered on November 19, 2022. The invoice was dated November 15, 2022, FOB Destination. Full payment was paid on January 15, 2023. The spot rate for the Singaporean Dollar on the respective dates is as follows (see image below). Answer the following subquestions: a. How much is the Purchases to be reported in 2022? b. How much is Foreign Exchange Gain (Loss) to be reported in 2022? ________________ thanks!arrow_forwardQuestion 1/ chapter 2 An entity took out a bank loan for 12 million dinars on 1 January 20X1. It repaid 3 million dinars to the bank on 30 November 20X1. The entity has a reporting date of 31 December 20X1 and a functional currency of dollars ($). Exchange rates are as follows: What is the total loss arising (to the nearest $000) on the above transactions in the year ended 31 December 20X1?arrow_forward
- DISCUSSION QUESTIONS Recreate Table 17.1 for the following currencies: Australian dollar, British pound, Canadian dollar, Chinese yuan, Euro, Japanese yen, and Swiss franc. Be sure to show both the direct quotations and indirect quotations. TABLE 17.1 Sample Exchange Rates: Friday, May 29, 2015 Direct Quotation: U.S. Dollars Required to Buy One Unit of Foreign Currency (1) Indirect Quotation: Number of Units of Foreign Currency per U.S. Dollar (2) Australian dollar 0.7644 1.3082 Brazilian real 0.3145 3.1793 British pound 1.5290 0.6540 Canadian dollar 0.8030 1.2454 Chinese yuan 0.1613 6.2004 Danish krone 0.1473 6.788 EMU euro 1.0993 0.9097 Hungarian forint 0.00355404 281.37 Israeli shekel 0.2586 3.8673 Japanese yen 0.00806 124.14 Mexican peso 0.0650 15.3776 South African rand 0.0823 12.1557 Swedish krona 0.1174 8.5195 Swiss franc 1.0636 0.9402 Venezuelan bolivar fuerte 0.1587289 6.3001 Nate: Column 2 equals 1.0 divided by column 1. However, rounding differences do occur. Source: Adapted from The Wall Street Journal (online.wsj.com). June 1, 2015.arrow_forward12 - CODE AND NAME OF THE ACCOUNT WILL BE DEBT 102 02 X BANK DTH DOLAR XXX120 02 INTERNATIONAL BUYER XXX646 02 IR. CHANGE DIFFERENCE XXXWhich transaction does the journal entry belong to? A) Collection record of the export in the current periodB) Import fee transfer recordC) Foreign income registrationD) Recording of the return of the export priceE) Registration of collection in the next period of the exportarrow_forwardCase 2. Honda Phil. is a subsidiary of Honda Japan. The functional currency of Honda Phil. is peso while the presentation currency of its parent, Honda Japan is yen. For the year ended December 31, 2020, Honda Phil. has the following foreign currency denominated assets: Accounts Receivable of $1,000 and Prepaid Asset of $100. The historical rates of Accounts receivable and Prepaid asset are $1=P30 and $1=P20 and P1=2Yen and P1=4Yen, respectively. The exchange rate on December 31, 2020 is 1$=40 and P1=3Yen. 2. In the separate statement of financial position of Honda Phil. on December 31, 2020, what is the book value of accounts receivable and prepaid asset, respectively? 3. what is the book value of accounts receivable and prepaid asset, respectively, in the Consolidated Statement of Financial Position of Honda Japan?arrow_forward
- 11 - In export transactions, the export price collected in advance from foreign buyers is recorded into which account (in foreign currency)?A) Receivable / To Account Advances GivenB) Bank Account / ReceivableC) Advances Received Account / ReceivableD) Advances Given Account / DebtE) Other Advances Received Account / Debtarrow_forward2 - Which account can a business use to monitor foreign currency transactions in foreign currency?I. Off-balance sheet account,II. Foreign currency deposit accounts,III. Foreign Currency SafeA) II-IIIB) Solo IIC) I-IID) I-II-IIIE) Only Iarrow_forwardHello, please help with letter a. Thank you 1) ABC Corp has Accounts Receivable of FC 400,000 and Accounts Payable FC 300,000 on both March 31 and April 30, 2010. The applicable exchange rates at that date were as follows: March 30 April 30 Spot rate 1FC = .35 US 1FC = .37 US Forward rate(1 month). 1FC= .36 US. 1FC= .39 US a) What is the FX transaction gain or loss on Accounts REeceivable on April 30, 2010? b) What is the FX transaction gain or loss on Accounts Payable on April 30, 2010? c) If on March 31, ABC wishes to hedge its exposure to changing exchange rates what is the appropriate action it will take. Answer by saying whether ABC will enter a spot contract or forward contract and say whether the contract will involve purchasing FC and selling US dollars, or purchasing US dollards and selling FC and specify the appropriate exchange…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Century 21 Accounting Multicolumn JournalAccountingISBN:9781337679503Author:GilbertsonPublisher:Cengage
Fundamentals of Financial Management, Concise Edi...FinanceISBN:9781305635937Author:Eugene F. Brigham, Joel F. HoustonPublisher:Cengage Learning
Century 21 Accounting Multicolumn Journal
Accounting
ISBN:9781337679503
Author:Gilbertson
Publisher:Cengage
Fundamentals of Financial Management, Concise Edi...
Finance
ISBN:9781305635937
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Cengage Learning