Chapter 10-4 - (10,000 ) x $.21 = (2,100 ) Ending net...

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CHAPTER 10 TRANSLATION OF FOREIGN CURRENCY FINANCIAL STATEMENTS Answers to Problems 13. C Beginning net assets, 1/1…………. . P20,000 x $.15 = $ 3,000 Increase in net assets: Income. ....................................... 10,000 x $.19 = 1,900 Ending net assets, 12/31. ................ P30,000 $ 4,900 Ending net assets at current exchange rate. ............... P30,000 x $.21 = $ 6,300 Translation Adjustment (positive) . $(1,400 ) 14. C By translating items carried at historical cost by the historical exchange rate, the temporal method maintains the underlying valuation method used by the foreign subsidiary. 15. A Beginning net monetary assets, 1/1 P100,000 x $.16 = $16,000 Increases in net monetary assets: Sale of inventory. ..................................... 50,000 x $.20 = 10,000 Decreases in net monetary assets: Purchase of equipment. ............ (60,000) x $.16 = (9,600) Purchase of inventory. .............. (30,000) x $.18 = (5,400) Transfer to parent. .....................
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Unformatted text preview: (10,000 ) x $.21 = (2,100 ) Ending net monetary assets, 12/31 P 50,000 $ 8,900 Ending net monetary assets at the current exchange rate. ........ P 50,000 x $.22 = (11,000 ) Remeasurement gain. ..................... $(2,100 ) 16. C Marketable equity securities are carried at market value and therefore translated at the current exchange rate under the temporal method. 17. B When the U.S. dollar is the functional currency, SFAS 52 requires remeasurement using the temporal method with remeasurement gains and losses reported in income. 18. B Wages payable is translated at the current exchange rate. 19. C Gains and losses on hedges of net investments (whether through a forward contract, borrowing, or other technique) are offset against the translation adjustment being hedged. 20. D Remeasurement gains are reported in the income statement as a part of income from continuing operations....
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Chapter 10-4 - (10,000 ) x $.21 = (2,100 ) Ending net...

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