Week 6 Excel Case data - J. Landers.xlsx

What is the impact on the subsidiarys liquidity

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What is the impact on the subsidiary’s liquidity, solvency and profitability financial ratios if the FC is the fun Rate and Temporal Method derived amounts tell the same story of the subsidiary’s financial standing?

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00 when the exchange rate was \$0.70. Other key transactions include: 00 at an average exchange rate of \$.63/FC. t Rate Method. Show all relevant computations in the space provided. Temporal Method. Show all relevant computations in the space provided. oints: ead of the USD? nctional currency instead of the USD? Do the ratios computed using the Current

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Week 6 Excel Case - Translating Foreign Currency Financial Statements Current Rate Method Temporal Meth December 31, 2018 FC Rate USD Rate Sales 5,800.00 0.65 A 3,770.00 0.65 A Cost of goods sold (3,200.00) 0.65 A (2,080.00) calculation Gross profit 2,600.00 subtotal ### 1,690.00 sub total ### Selling expense (500.00) 0.65 A (325.00) 0.65 A Depreciation expense (700.00) 0.65 A (455.00) 0.7 H Remeasurement gain/loss - to balance Income before tax 1,400.00 subtotal ### 910.00 sub total ### Income taxes (400.00) 0.65 A (260.00) 0.65 A Net income 1,000.00 subtotal ### 650.00 sub total ### Retained earnings, 1/1/18 - Ret. earnings, 12/31/18 1,000.00 total ### 650.00 total ### Cash 1,800.00 0.58 C 1,044.00 0.58 C Inventory 2,400.00 0.58 C 1,392.00 0.63 H Fixed assets 7,000.00 0.58 C 4,060.00 0.7 H Less: accum/deprec (700.00) 0.58 C (406.00) 0.7 H Total assets 10,500.00 total ### 6,090.00 total ### Current liabilities 1,500.00 0.58 C 870.00 0.58 C Long-term debt 3,500.00 0.58 C 2,030.00 0.58 C Contributed capital 4,500.00 0.7 H 3,150.00 0.7 H Cum. trans. adjust.* - to balance (610.00) Retained earnings 1,000.00 650.00 Total liab and stock equity 10,500.00 total ### 6,090.00 ### Exchange Rates Temporal method—COGS (on a FIFO basis) January 1-31, 2018 (H) 0.7 BI 2000 0.7 H Average 2018 (A) 0.65 P 3600 0.63 H December 31, 2018 (C) 0.58 EI -2400 0.63 H Inventory purchases 0.63 COGS 3200
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