Chapter 10-13 - Inventory 58,000 x 1/.65 = 89,231 Fixed...

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CHAPTER 10 TRANSLATION OF FOREIGN CURRENCY FINANCIAL STATEMENTS Answers to Problems 32. (30 minutes) (Translate the financial statements of a foreign subsidiary) LIVINGSTON COMPANY Income Statement For Year Ending December 31, 2007 Goghs U.S. Dollars Sales 270,000 x 1/.63 = 428,571 Cost of Goods Sold (155,000 ) x 1/.63 = (246,032 ) Gross Profit 115,000 182,539 Operating Expenses (54,000) x 1/.63 = (85,714) Gain on Sale of Equipment 10,000 x 1/.58 = 17,241 Net Income 71,000 114,066 Statement of Retained Earnings For Year Ending December 31, 2007 Goghs U.S. Dollars Retained Earnings, 1/1/07 216,000 given 395,000 Net Income 71,000 above 114,066 Dividends Paid (26,000 ) x 1/.62 = (41,935 ) Retained Earnings, 12/31/07 261,000 467,131 Balance Sheet December 31, 2007 Goghs U.S. Dollars Cash 44,000 x 1/.65 = 67,692 Receivables 116,000 x 1/.65 = 178,462
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Unformatted text preview: Inventory 58,000 x 1/.65 = 89,231 Fixed Assets (net) 339,000 x 1/.65 = 521,538 Total 557,000 856,923 Liabilities 176,000 x 1/.65 = 270,769 Common Stock 120,000 x 1/.48 = 250,000 Retained Earnings 261,000 above 467,131 Translation Adjustment (130,977 ) Total 557,000 856,923 Translation Adjustment Goghs U.S. Dollars Net assets, 1/1/07 336,000 x 1/.60 = 560,000 Net income, 2007 71,000 above 114,066 Dividends paid (26,000 ) above (41,935 ) Net assets, 12/31/07 381,000 632,131 Net assets at current exchange rate, 12/31/07 381,000 x 1/.65 = 586,154 Translation adjustment, 2007 (negative) 45,977 Cumulative translation adjustment, 1/1/07 (negative) 85,000 Cumulative translation adjustment, 12/31/07 (negative) 130,977...
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Chapter 10-13 - Inventory 58,000 x 1/.65 = 89,231 Fixed...

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