536-6a_HW[1]

536-6a_HW[1] - 536-6a_HW, 11S FIN 536 SU Page 1 of 18 Topic...

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Unformatted text preview: 536-6a_HW, 11S FIN 536 SU Page 1 of 18 Topic 6 Manage Accounting Exposure (Chapter 13) * Homework Solution P13.1: Use as the functional currency Local currencyPhrase 1: Functional Currency Phrase 2: Reporting Currency Dec 31 & Jan 2Dec 31Jan 2Dec 31Jan 2S=$/S=$/ S=$/$S=$/$Cash 1,6001.2000$1,9200.9000$1,440AR 3,2001.2000$3,8400.9000$2,880Inventory (BV) 2,4001.2000$2,8800.9000$2,160Fixed A. 4,8001.2000$5,7600.9000$4,320Total Asset 12,00014,400$10,800AP 8001.2000$9600.9000$720ST bank loan 1,6001.2000$1,9200.9000$1,440LT debt 1,6001.2000$1,9200.9000$1,440Common Stock 1,8001.2760$2,2971.2760$2,297R.E. 6,2001.2000$7,4401.2000$7,440CTA -$137-$2,537Total L+E 12,000$14,400$10,800Ans: Translation loss of -$2400 recorded in CTA * Homework Solution P13.2: Use $ as the functional currency Local currencyPhrase 1: Functional Currency Phrase 2: Reporting Currency Dec 31 & Jan 2Dec 31Jan 2Dec 31Jan 2S=$/$S=$/$ S=$/$S=$/$Cash 1,6001.2000$1,9200.9000$1,440 AR 3,2001.2000$3,8400.9000$2,880 Inventory (BV) 2,4001.2180$2,9231.2180$2,923 Fixed A. 4,8001.2760$6,1251.2760$6,125 Total Asset 12,00014,808$13,368 AP 8001.2000$9600.9000$720 ST bank loan 1,6001.2000$1,9200.9000$1,440 LT debt 1,6001.2000$1,9200.9000$1,440 Common Stock 1,8001.2760$2,2971.2760$2,297 R.E. 6,200$7,711$7,471 CTA Total L+E 12,000$14,808$13,368 Ans: Translation loss of -$240 recorded in income statement and carried into RE 536-6a_HW, 11S FIN 536 SU Page 2 of 18 * Homework Solution P13.3: Use as the functional currency Local currency Phrase 1: Functional Currency Phrase 2: Reporting Currency Dec 31 & Jan 2 Dec 31Jan 2Dec 31Jan 2 S=$/S=$/ S=$/$S=$/$Cash 1,600 1.2000$1,9201.5000$2,400AR 3,200 1.2000$3,8401.5000$4,800Inventory (BV) 2,400 1.2000$2,8801.5000$3,600Fixed A. 4,800 1.2000$5,7601.5000$7,200Total Asset 12,000 14,400$18,000AP 800 1.2000$9601.5000$1,200ST bank loan 1,600 1.2000$1,9201.5000$2,400LT debt 1,600 1.2000$1,9201.5000$2,400Common Stock 1,800 1.2760$2,2971.2760$2,297R.E. 6,200 1.2000$7,4401.2000$7,440CTA 0 -$137$2,263Total L+E 12,000 $14,400$18,000Ans: Translation gain of $2400 recorded in CTA * Homework Solution P13.4: Use $ as the functional currency Local currency Phrase 1: Functional Currency Phrase 2: Reporting Currency Dec 31 & Jan 2 Dec 31Jan 2Dec 31Jan 2 S=$/$S=$/$ S=$/$S=$/$Cash 1,600 1.2000$1,9201.5000$2,400 AR 3,200 1.2000$3,8401.5000$4,800 Inventory (BV) 2,400 1.2180$2,9231.2180$2,923 Fixed A. 4,800 1.2760$6,1251.2760$6,125 Total Asset 12,000 14,808$16,248 AP 800 1.2000$9601.5000$1,200 ST bank loan 1,600 1.2000$1,9201.5000$2,400 LT debt 1,600 1.2000$1,9201.5000$2,400 Common Stock 1,800 1.2760$2,2971.2760$2,297 R.E. 6,200 $7,711$7,951 CTA 0 Total L+E 12,000 $14,808$16,248 Ans: Translation gain of $240 recorded in income statement and carried into RE536-6a_HW, 11S FIN 536 SU Page 3 of 18 * Homework Solution P13.8: Use B as the functional currency (Assume FX = 34 B/$ for retain earnings) Local currency...
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This note was uploaded on 11/07/2011 for the course FIN 536 taught by Professor Staff during the Spring '11 term at S.F. State.

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536-6a_HW[1] - 536-6a_HW, 11S FIN 536 SU Page 1 of 18 Topic...

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