Homework Help is Here – Start Your Trial Now!
Business
Accounting
EXHIBIT 11.6 Ganado Europe's Translation Loss After Depreciation of the Euro: Temporal Method January 2, 2016 Exchange Rate (US$leuro) 1.6200 December 31, 2015 Exchange Rate (US$leuro) 1.1100 Translated Accounts (US$) $1,332,000 Translated In Euros (€) 1,200,000 Accounts (US$) $1,944,000 Assets Cash Accounts receivable 2,800,000 1.1100 3,108,000 1.6200 4,536,000 Inventory Net plant and equipment 3,285,700 5,337,000 $13,062,700 2,900,000 1.1330 1.1330 3,285,700 4,500,000 11,400,000 1.1860 1.1860 5,337,000 Total $15,102,700 Liabilities and Net Worth Accounts payable 1,200,000 1,800,000 1,300,000 1,900,000 1.1100 $1,332,000 1.6200 $1,944,000 Short-term bank debt 1.1100 1,998,000 1.6200 2,916,000 Long-term debt 1.1100 1,443,000 1.6200 2,106,000 Common stock 1.1860 2,253,400 1.1860 2,253,400 1.1525 (b) Retained earnings Translation gain (loss) 5,200,000 1.1525 (a) 6,036,300 6,036,300 (c) Total 11,400,000 $13,062,700 $15,102,700 (a) Dollar retained earnings before depreciation are the cumulative sum of additions to retained earnings of all prior years, translated to exchange rates in each year. (b) Translated into dollars at the same rate as before depreciation of the euro. (c) Under the temporal method, the translation loss would be closed into retained earnings through the income statement rather

EXHIBIT 11.6 Ganado Europe's Translation Loss After Depreciation of the Euro: Temporal Method January 2, 2016 Exchange Rate (US$leuro) 1.6200 December 31, 2015 Exchange Rate (US$leuro) 1.1100 Translated Accounts (US$) $1,332,000 Translated In Euros (€) 1,200,000 Accounts (US$) $1,944,000 Assets Cash Accounts receivable 2,800,000 1.1100 3,108,000 1.6200 4,536,000 Inventory Net plant and equipment 3,285,700 5,337,000 $13,062,700 2,900,000 1.1330 1.1330 3,285,700 4,500,000 11,400,000 1.1860 1.1860 5,337,000 Total $15,102,700 Liabilities and Net Worth Accounts payable 1,200,000 1,800,000 1,300,000 1,900,000 1.1100 $1,332,000 1.6200 $1,944,000 Short-term bank debt 1.1100 1,998,000 1.6200 2,916,000 Long-term debt 1.1100 1,443,000 1.6200 2,106,000 Common stock 1.1860 2,253,400 1.1860 2,253,400 1.1525 (b) Retained earnings Translation gain (loss) 5,200,000 1.1525 (a) 6,036,300 6,036,300 (c) Total 11,400,000 $13,062,700 $15,102,700 (a) Dollar retained earnings before depreciation are the cumulative sum of additions to retained earnings of all prior years, translated to exchange rates in each year. (b) Translated into dollars at the same rate as before depreciation of the euro. (c) Under the temporal method, the translation loss would be closed into retained earnings through the income statement rather

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
EXHIBIT 11.6 Ganado Europe's Translation Loss After Depreciation of the Euro: Temporal Method December 31, 2015 January 2, 2016 Exchange Rate (US$leuro) Translated Exchange Rate (US$leuro) Translated Assets In Euros (€) Accounts (US$) Accounts (US$) Cash 1.1100 $1,332,000 3,108,000 $1,944,000 4,536,000 3,285,700 5,337,000 1,200,000 1.6200 Accounts receivable 2,800,000 1.1100 1.6200 Inventory 2,900,000 1.1330 3,285,700 1.1330 Net plant and equipment 4,500,000 1.1860 5,337,000 1.1860 Total 11,400,000 $13,062,700 $15,102,700 Liabilities and Net Worth Accounts payable 1,200,000 1,800,000 1,300,000 $1,332,000 1,998,000 1.1100 1.6200 $1,944,000 Short-term bank debt 1.1100 1.6200 2,916,000 Long-term debt 1.1100 1,443,000 1.6200 2,106,000 Common stock 1,900,000 1.1860 2,253,400 1.1860 2,253,400 1.1525 (a) Retained earnings Translation gain (loss) 1.1525 (b) (c) 5,200,000 6,036,300 6,036,300 ? | Total 11,400,000 $13,062,700 $15,102,700 (a) Dollar retained earnings before depreciation are the cumulative sum of additions to retained earnings of all prior years, translated to exchange rates in each year. (b) Translated into dollars at the same rate as before depreciation of the euro. (c) Under the temporal method, the translation loss would be closed into retained earnings through the income statement rather
Transcribed Image Text:EXHIBIT 11.6 Ganado Europe's Translation Loss After Depreciation of the Euro: Temporal Method December 31, 2015 January 2, 2016 Exchange Rate (US$leuro) Translated Exchange Rate (US$leuro) Translated Assets In Euros (€) Accounts (US$) Accounts (US$) Cash 1.1100 $1,332,000 3,108,000 $1,944,000 4,536,000 3,285,700 5,337,000 1,200,000 1.6200 Accounts receivable 2,800,000 1.1100 1.6200 Inventory 2,900,000 1.1330 3,285,700 1.1330 Net plant and equipment 4,500,000 1.1860 5,337,000 1.1860 Total 11,400,000 $13,062,700 $15,102,700 Liabilities and Net Worth Accounts payable 1,200,000 1,800,000 1,300,000 $1,332,000 1,998,000 1.1100 1.6200 $1,944,000 Short-term bank debt 1.1100 1.6200 2,916,000 Long-term debt 1.1100 1,443,000 1.6200 2,106,000 Common stock 1,900,000 1.1860 2,253,400 1.1860 2,253,400 1.1525 (a) Retained earnings Translation gain (loss) 1.1525 (b) (c) 5,200,000 6,036,300 6,036,300 ? | Total 11,400,000 $13,062,700 $15,102,700 (a) Dollar retained earnings before depreciation are the cumulative sum of additions to retained earnings of all prior years, translated to exchange rates in each year. (b) Translated into dollars at the same rate as before depreciation of the euro. (c) Under the temporal method, the translation loss would be closed into retained earnings through the income statement rather
Ganado Europe (D). Using facts in the chapter for Ganado Europe, assume that the exchange rate on January 2, 2016, in Exhibit 11.6 appreciated from $1.1100/€ to $1.6200/€. Calculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the temporal rate method as shown in the popup window, E a. What is the amount of translation gain or loss? b. Where should it appear in the financial statements? ..... a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss. (Round to the nearest dollar.)
Transcribed Image Text:Ganado Europe (D). Using facts in the chapter for Ganado Europe, assume that the exchange rate on January 2, 2016, in Exhibit 11.6 appreciated from $1.1100/€ to $1.6200/€. Calculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the temporal rate method as shown in the popup window, E a. What is the amount of translation gain or loss? b. Where should it appear in the financial statements? ..... a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss. (Round to the nearest dollar.)
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Ratio Analysis
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS