Chapter 10-14 - CHAPTER 10 TRANSLATION OF FOREIGN CURRENCY...

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CHAPTER 10 TRANSLATION OF FOREIGN CURRENCY FINANCIAL STATEMENTS Answers to Problems 33. (35 minutes) (Compute translation adjustment and remeasurement gain or loss) a. Remeasurement Gain or Loss Net monetary assets, 1/1/07* 2,000 KR x 2.50 = $ 5,000 Increases in net monetary assets: Issued Common Stock (4/1/07) 10,000 KR x 2.60 = 26,000 Sold Building** (7/1/07) 22,000 KR x 2.80 = 61,600 Sales (2007) 80,000 KR x 2.70 = 216,000 Decreases in net monetary assets: Purchased Equipment (4/1/07) (30,000) KR x 2.60 = (78,000) Paid Dividends (10/1/07) (32,000) KR x 2.90 = (92,800) Rent Expense (2007) (14,000) KR x 2.70 = (37,800) Salary Expense (2007) (20,000) KR x 2.70 = (54,000) Utilities Expense (2007) ( 5,000 ) KR x 2.70 = (13,500 ) Net monetary assets, 12/31/07 13,000 KR $ 32,500 Net monetary assets, 12/31/07 at current exchange rate 13,000 KR x 3.00 = 39,000 Remeasurement gain (credit) $ (6,500 ) * Net monetary assets: (Cash + Accounts Receivable) - (Account Payable + Bonds Payable) ** To determine cash proceeds from the sale of the building, changes in the
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Chapter 10-14 - CHAPTER 10 TRANSLATION OF FOREIGN CURRENCY...

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