Example - In Class Exercise Chapter 10 September 12 Assume...

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In Class Exercise - Chapter 10, September 12 Assume USCO forms a wholly owned subsidiary in Switzerland (SWISSCO) on 12/31/2010. On that date, USCO invested $300,000 in exchange for all of the subsidiary's common stock Given the exchange rate of $0.60 per CHF, the initial capital investment was CHF 500,000 of which 150,000 was immediately invested in inventory and the remainder held in cash. It generated income after taxes of CHF 470,000 and declared dividends of CHF 150,000. Translate or remeasure the financial statements to U.S. dollars using the current rate method or temporal method During 2011 following events occurred: Date Event Exchange Rate 3/15/2011 Purchased equipment $0.61 3/15/2011 Negotiated five year long term loan $0.61 4/10/2011 Acquired a patent $0.62 10/1/2011 Dividends were declared $0.67 Beginning year rate $0.60 Average 2011 rate $0.65 Average Fourth Quarter 2011 $0.68 Ending year rate $0.70 Information about inventory beginning inventory, 1/1/2011 CHF 150,000 $0.60 Purchases, 2011 3,250,000 $0.65 ending inventory, 12/31/2011 400,000 $0.68
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This note was uploaded on 11/05/2011 for the course ACCT 501 taught by Professor Ma during the Fall '11 term at South Carolina.

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Example - In Class Exercise Chapter 10 September 12 Assume...

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