Provide all entries necessary to record each of these transactions in December and January.
What is the impact of the transactions on the income statement and balance sheet as of 12/31?
The spot rates for the currencies were as follows:
12/10/2009 $0.60/R$ 12/15/2009 $1.50/Euro
12/31/2009 $0.65/R$ 12/31/2009 $1.65/Euro
1/31/2010 $0.62/R$ 1/15/2010 $1.60/Euro
(B) Using the example on p. 177 (Table 9.6), and the relevant exchange rates (US$/Rubles) as follows:
Historical rate = .002
December 31, 1998 (and Avg. during 1998) = 0.0013
December 31, 1999 (and Avg. during 1999) = 0.003
Compute the total cost of inventories (in US$) for the year ending 1999 using the temporal method (inventory cost in Rubles was 30,000).
How would this change if the current method was used?
Which of the two methods is more conservative and why (see Ch. 7 for definition of conservatism)
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