Chapter 10-10 - (18,000 ) LCU x $.26 = (4,680 ) Net...

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CHAPTER 10 TRANSLATION OF FOREIGN CURRENCY FINANCIAL STATEMENTS Answers to Problems 28. (20 minutes) (Compute translation adjustment and remeasurement gain or loss) a. The translation adjustment is based on changes in the net assets of the subsidiary. Net assets, 1/1 82,000 LCU x $.24 = $19,680 Changes in net assets Rendered services 30,000 LCU x $.25 = 7,500 Incurred expense (18,000 ) LCU x $.26 = (4,680 ) Net assets, 12/31 94,000 LCU 22,500 Net assets, 12/31 at current exchange rate 94,000 LCU x $.29 = 27,260 Translation adjustment (positive) $(4,760 ) b. The remeasurement gain or loss is based on changes in the net monetary assets of the subsidiary. Net monetary assets, 1/1 22,000 LCU x $.24 = $ 5,280 Changes in net monetary assets Rendered services 30,000 LCU x $.25 = 7,500 Incurred expense
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Unformatted text preview: (18,000 ) LCU x $.26 = (4,680 ) Net monetary assets, 12/31 34,000 LCU $ 8,100 Net monetary assets, 12/31 at current exchange rate 34,000 LCU x $.29 = 9,860 Remeasurement gain $(1,760 ) c. Translated value of land 60,000 LCU x $.29 = $17,400 Remeasured value of land 60,000 LCU x $.23 = $13,800 29. (10 minutes) (Determine the appropriate exchange rate) Account (a) Translation (b) Remeasurement Sales 20 A 20 A Inventory 22 C 19 H Equipment 22 C 13 H Rent expense 20 A 20 A Dividends 21 H 21 H Notes receivable 22 C 22 C Accumulated depreciation--equipment 22 C 13 H Salary payable 22 C 22 C Depreciation expense 20 A 13 H C = current exchange rate, A = average exchange rate, H = Historical exchange rate...
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This note was uploaded on 02/08/2012 for the course ACCOUNTING 559 taught by Professor Keating during the Spring '07 term at DeVry Addison.

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Chapter 10-10 - (18,000 ) LCU x $.26 = (4,680 ) Net...

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