A U.S. company owns an 80% interest in a company located on Mars. Martian currency is called the Martian Credit. During the year the parent company sold inventory that had cost $24,500 to the subsidiary on account for $30,100 when the exchange rate was $0.5192. The subsidiary still held one-half of the inventory and had not paid the parent company for the purchase at the end of the fiscal period. The unsettled account is denominated in dollars. The exchange rate at the fiscal year-end was $0.4994. (a1) Compute the amounts that would be reported for the inventory and accounts payable in the subsidiary's translated balance sheet. The entity's functional currency is the Martian Credit. (Round answers to 0 decimal places, e.g. 5,125.) Inventory Accounts Payable tA $ tA $
Q: The Marshall Company has a joint production process that produces two joint products and a…
A: Manufacturing expenses are made up of various elements. The price of direct labor, the price of…
Q: Journalize the following transactions for Becah's Bakery: Becah's Bakery a. Incurred and paid…
A: Direct material cost is the cost of raw material produced or purchased to produce the final…
Q: Bernes Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one…
A: Variance arises when the actual costs differ from the standard costs. The results are favorable…
Q: At January 1, 2024, Covington Inc. reported the following information on its statement of financial…
A: T-accounts are individual general ledger accounts used in accounting.A T-Account is also known as a…
Q: Use the breakeven model to determine which of the statements below is TRUE according to the…
A: The Break-Even Model in facility location selection involves determining the level of activity at…
Q: Calculate the QBI deduction for Nasir, who is filing single. His taxable income before any QBI…
A: The Qualified Business Income (QBI) deduction is a tax provision introduced as part of the Tax Cuts…
Q: key Jenny a joint investment expenses. They also incur $4,750 of investment interest expense during…
A: Investment represents something which gives a return. Interest expense is interest paid or accrued…
Q: Sully Company's inventory records for the most recent year contain the following data: (Click the…
A: Inventory valuation is based on the flow of issuing inventory used by the organization. It can be…
Q: organ Weatherspoon, a super salesman contemplating retirement on his fifty-fifth birthday, decides…
A: Future value gives information about how an investment might increase or how much money could…
Q: Information Direct Materials Cost (food) Direct Labor Cost Labor Hours Direct Materials Direct Labor…
A: The cost accounting technique known as job costing allows a business to plan and manage the expenses…
Q: Lightsey Natural Dying Corporation measures its activity in terms of skeins of yarn dyed. Last…
A: Spending variance is the difference between the budgeted and actual costs incurred, providing…
Q: During December, Maxum Company sold 3,900 units of a product that carries a 60-day warranty.…
A: Journal Entry :— It is an act of recording transactions in books of account when transaction…
Q: Longmire & Sons made sales on credit to Alderman Sports totaling $500,000 on April 18. The cost of…
A: Periodic inventory method involves updating inventory records at specific intervals rather than…
Q: The following information applies to the questions displayed below.) University Car Wash built a…
A: Depreciation is the allocation of cost of asset over the useful life of the asset.
Q: Indicate what category of quality costs are the following costs (one of the four quality costs…
A: Quality costs are typically categorized into four main categories: prevention costs, appraisal…
Q: Down Under Products' sales budget for the next four months is as follows: Unit Sales 88,000 90,000…
A: The production budget is a financial plan that calculates the number of units to be manufactured. It…
Q: Calculating Manufacturing Cycle Efficiency Indy Company has the following data for one of its…
A: Processing time = Theoretical cycle time= 6 minutesNon processing time = Actual cycle time -…
Q: Acquisition Cost of Long-Lived Asset The following data relate to a firm's purchase of a machine…
A: ACQUISITION COSTAquisition Cost are those costs which occur when a buyer purchases an asset for the…
Q: On January 1, 2024, the Highlands Company began construction on a new manufacturing facility for its…
A: When interest is capitalized, the cost of building or purchasing a particular asset is included in…
Q: The audit firm is acting as an expert witness directly for the audit client. What type of threat to…
A: Answer:- Audit meaning:- Audit is the independent examination of financial statements of an entity…
Q: 1. ((a) Progressive Services, Inc. has just declared a 7 for 3 stock split. The company's pre-split…
A: Existing No. of Shares= 2000,000Stock split ratio= 7 for 3Revised No. of Common Stock=…
Q: 14 ABG bought a patent for €6,145. The patent is legally protected for a period of 10 years during…
A: When ABG acquires a patent for €6,145, the initial recognition would involve capitalizing the cost…
Q: Kapoor Catering Co. uses a job cost system. Its activities in November 2020, the first month of…
A: According to the question given, we need to compute the job cost..Job costing:Job costing refers to…
Q: Pharoah Service Company had checks outstanding totaling $28600 on its May bank reconciliation. In…
A: An outstanding check is a check that a company has issued and recorded in its general ledger…
Q: Hilltop Company produces two products, Debit and Credit. Hilltop Company can sell all of the units…
A: Calculations for the most profitable sales mix for JK Company are as…
Q: Monroe Company had a beginning inventory of 355 cans of paint at $12.50 each on January 1 at a cost…
A: An inventory method known as first in, first out makes the assumption that the first goods acquired…
Q: he does not participate in an employer-sponsored plan, what is the m 2 if he has earned income of…
A: The term "IRA" refers to an Individual Retirement Arrangement, which is a tax-favored personal…
Q: Bond discount, entries for bonds payable transactions, interest method of amortizing bond discount…
A: The bonds are issued to raise money from the market or investors. The bonds are reported as the…
Q: PT Partnership begins with 2 partners. Parrot contributes assets with a FMV of $50,000 and an…
A: In a partnership, the initial contributions made by partners are generally not taxable events for…
Q: A company began 2024 with 17,000 units of inventory on hand. The cost of each unit was $5.00.…
A: Inventory, based on its intended use and where it is in the manufacturing or distribution process.…
Q: MusicMagic specializes in sound equipment. Company records indicate the following data for a line of…
A: Inventory includes all the items, merchandise, and raw materials that are used by the business…
Q: John works in New Jersey and lives in Pennsylvania. What is the correct tax treatment of his wages?
A: An individual or any other entity has to pay taxes on the income earned by them during the tax…
Q: Mauro Products distributes a single product, a woven basket whose selling price is $23 per unit and…
A: Break even point :— It is the point of production where total cost is equal to total revenue. At…
Q: 1 Baratie Restaurant 2 Worksheet 3 For the period ended December 31, 2022 4 5 Accounts 6 Cash 7…
A: A 10-column worksheet helps to provide a structured format in accounting and financial management to…
Q: PKT Ltd wanted to achieve a 25% GP for each sale completed. Inventory sales between AB and CF Ltd…
A: Answer:- Journal entries refer to the initial recording of financial transactions that are made in…
Q: Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in…
A: Dave's Capital = (Tatsuki Capital's Fair Market Value + Robert Capital's Fair Market Value) *…
Q: A large chiller was purchased for $10,000 and has accumulated depreciation of $8,000. The chiller…
A: The objective of this question is to understand how to record the sale of a fixed asset in the…
Q: 1. Access the International Federation of Accountants Web site (www.ifac.org ) and briefly describe…
A: When performing audits, auditors are required to follow a set of principles and criteria known as…
Q: Margaret's Massages is a day spa providing relaxing treatment to its clients. Margaret's Massages…
A: The budget is prepared to estimate the requirements for the period. The selling and administrative…
Q: e. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his…
A: Partnership interest refers to the portion of equity interest in the partnership company. Every…
Q: Inventory records for Eliza Company revealed the following Number of Units 1,060 560 860 510 Date…
A: INVENTORY VALUATIONInventory Valuation is a Method of Calculation of Value of Inventory at the End…
Q: paid Website expenses, $2,770. b. Incurred manufacturing wages of $9,800, of which 80% was for…
A: A journal entry is a basic accounting record that is used to chronologically track financial…
Q: The following partial budget versus actual report was prepared for Otis the Great, a manufacturer of…
A: The flexible budget is prepared for actual level of production. It is prepared on the basis of the…
Q: Haricot Corporation and Pinto Corporation both have operating profits of $135 million. Haricot is…
A: For investors and analysts, operating profit is an essential indicator or tool because it provides…
Q: During May of 2019, XYZ Inc had an opening cash balance of $500,000, budgeted cash receipts of…
A: The cash budget is the estimated cash statement prepared by the management to estimate possible…
Q: Bulluck Corporation makes a product with the following standard costs: Standard Quantity or…
A: The difference between the standard or expected cost of the materials used in manufacturing and…
Q: You need to estimate the value of Laputa Aviation. You have the following forecasts (in millions of…
A: Companys Value using FCFF - Free cash flow (FCF) from operations is the cash available to pay back…
Q: At December 31, Hawke Company reports the following results for its calendar year. Cash sales. $…
A: Bad debt is the amount which is not recoverable from the debtor and is considered as a loss for the…
Q: Accrued salaries at December 31 amounted to $31,560. Ignore related payroll liabilities. Salaries…
A: The objective of the question is to determine the adjusting entry for accrued salaries at the end of…
Q: Moran owns a building he bought during year 0 for $221,000. He sold the building in year 6. During…
A: The U.S. Internal Revenue Code, Section 1231, provides guidelines on how to handle gains and losses…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- On January 1, Narnevik Corporation formed a subsidiary in a foreign country. On April 1, the subsidiary purchased inventory on account at a cost of 250,000 local currency units (LCU). One-fifth of this inventory remained unsold on December 31, while 30 percent of the account payable had not yet been paid. The U.S. $ per LCU exchange rates were as follows:At what amounts should the December 31 balances in inventory and accounts payable be translated into U.S. dollars using the current rate method?On January 1, Narnevik Corporation formed a subsidiary in a foreign country. On April 1, the subsidiary purchased inventory on account at a cost of 250,000 local currency units (LCU). One-fifth of this inventory remained unsold on December 31, while 30 percent of the account payable had not yet been paid. The U.S.dollar–per-LCU exchange rates were as follows: January 1 $ 0.60 April 1 0.58 Average for the current year 0.56 December 31 0.54 At what amounts should the December 31 balances in inventory and accounts payable be translated into U.S. dollars using the current rate method?In order to demonstrate the use of the remeasurement process, assume that at the beginning of the year a U.S. parent company invested 100,000 foreign currency B (FCB) to form a 100% owned subsidiary.The subsidiary immediately invested the foreign currency in land at a cost of 50,000 FCB and inventory with a cost of 50,000 FCB. At midyear, 50% of the inventory was sold for 40,000 FCB. At year-end, assume that the sale is still uncollected. Although FCB is the subsidiary’s functional currency, the subsidiary maintains its books of record in foreign currency A (FCA). Assume the following exchange rates: Beginning of Year Mid Year End of Year1 FCB equals . . . . . . 12.5 FCA 8 FCA 10 FCA1 FCA equals. . . . . . 0.08 FCB 0.125 FCB 0.10 FCB1 FCA equals. . . . . . $0.20 $0.40 $0.301 FCB equals . . . . . . $2.50…
- Meadows Limited, a foreign subsidiary of U.S. based Meadows Inc. operates primarily for the benefit of its parent company. When the exchange rate was $1.30 per one British Pound Sterling (£), Meadows Limited purchased Inventory for £2,100 pounds. Meadows resells one-third of the inventory for £900 when the exchange rate was $1.26 per Pound Sterling and another one-third for £900 when the exchange rate was $1.28 per Pound Sterling. The parent company applies the temporal method in its process of consolidating the financial results of its subsidiaries with its own financial results. Meadows Inc. reports sales revenue associated with its subsidiary in the amount of: Multiple Choice: $2,340 $2,304 $2,286 $2,268A foreign subsidiary of Thun Corporation has one asset (inventory) and no liabilities. The functional currency for this subsidiary is the yuan. The inventory was acquired for 100,000 yuan when the exchange rate was $0.16 = 1 yuan. Consolidated statements are to be produced, and the current exchange rate is $0.12 = 1 yuan. Which of the following statements is true for the consolidated financial statements?a. A remeasurement gain must be reported.b. A positive translation adjustment must be reported.c. A negative translation adjustment must be reported.d. A remeasurement loss must be reported.A foreign subsidiary of Thun Corporation has one asset (inventory) and no liabilities. The functional currency for this subsidiary is the yuan. The inventory was acquired for 100,000 yuan when the exchange rate was $0.16 = 1 yuan. Consolidated statements are to be produced, and the current exchange rate is $0.12 = 1 yuan. Which of the following statements is true for the consolidated financial statements? A remeasurement gain must be reported. A positive translation adjustment must be reported. A negative translation adjustment must be reported. A remeasurement loss must be reported.
- Columbia Corporation, a U.S.-based company, acquired a 100% interest in Swoboda Company in Lodz, Poland on January 1, Year 1 when the exchange rate for the Polish zloty was $0.25. Translate Swoboda’s financial statements into U.S dollars in accordance with U.S. GAAP at December 31, Year 2, using the three scenarios presented in the case and explain why the translation adjustments end up as positive or negative numbers.A foreign subsidiary of Thun Corporation has one asset (inventory) and no liabilities. The functional currency for this subsidiary is the yuan. The inventory was acquired for 100,000 yuan when the exchange rate was $0.16 = 1 yuan. Consolidated statements are to be produced, and the current exchange rate is $0.12 = 1 yuan. Which of the following statements is true for the consolidated financial statements? Choose the correct.a. A remeasurement gain must be reported.b. A positive translation adjustment must be reported.c. A negative translation adjustment must be reported.d. A remeasurement loss must be reported.Columbia Corporation, a U.S.-based company, acquired a 100% interest in Swoboda Company in Lodz, Poland on January 1, Year 1 when the exchange rate for the Polish zloty was $0.25. Translate Swoboda’s financial statements into U.S dollars in accordance with U.S. GAAP at December 31, Year 2, using the three scenarios presented in the case and explain why the translation adjustments end up as positive or negative numbers. Read the case on page 325 of the textbook and submit an Excel file with your response to questions 1 and 2. For question 1, prepare the financial statements under each of the three scenarios as instructed.
- Hughes Inc. has a wholly owned subsidiary in Canada that previously had been determined as having the Canadian dollar as its functional currency. Due to a recent restructuring, Hughes Inc.'s CFO believes that the functional currency of the Canadian company has changed to the U.S. dollar. A large cumulative translation adjustment related to the Canadian subsidiary is included in accumulated other comprehensive income on Hughes Inc.'s balance sheet. The CFO is unsure whether the cumulative translation adjustment should be removed from equity, and if so, to what other account it should be transferred. He also questions whether the change in functional currency qualifies as a change in accounting principle, which would require retrospective application of the temporal method in translating the Canadian subsidiary's financial statements. He wonders, for example, whether the Canadian subsidiary's nonmonetary assets need to be restated as if the temporal in applied in previous years.…Kingsfield establishes a subsidiary operation in a foreign country on January 1, 2020. The country’s currency is the rial (R). To start this business, Kingsfield invests 10,000 rials. Of this amount, it spends 3,000 rials immediately to acquire equipment. Later, on April 1, 2020, it also purchases land. All subsidiary operational activities occur at an even rate throughout the year. Kingsfield uses the U.S. dollar as its reporting currency. The U.S. dollar ($) exchange rates for the rial for 2020 follow: January 1 $ 1.71 April 1 1.59 June 1 1.66 Weighted average 1.64 December 31 1.62 As of December 31, 2020, the subsidiary reports the following trial balance: Debits Credits Cash R 8,000 Accounts receivable 9,000 Equipment 3,000 Accumulated depreciation R 600 Land 5,000 Accounts payable 3,000 Notes payable (due 2028) 5,000 Common stock 10,000 Dividends declared…4. On January 1, the wholly- owned Mexican affiliate of a Canadian percent company acquired an inventory of computer hard drives for its assembly operation. The cost incurred was 351000 pesos when the exchange rate was MXN 11.7=C$1. By year-end, the Mexican affiliate had used three-fourths of the acquired hard drives. Due to advance in hardware technology, the remaining inventory was marked down to its net realizable value of MXN 18000. The year-end exchange rate was MXN 10.5 = C$1. The average rate during the year was MXN 10 = C$1.Translate the ending inventory to Canadian dollars assuming the Mexican affiliate’s functional currency is the Canadian dollar