The following are the balance sheets of Jamaica Limited, Barbados Limited and Trinidad Limited, as at the 31 December 2019. The three companies are major players in the retail food industry. Jamaica Limited acquired 70% of the shares in Barbados Limited on January 1 2017 when the reserve balances were as follows: General reserves: $10,000 and retained earnings $12 000. The acquisition of Barbados Limited consisted of a cash payment of $600,000 to be settled in four years' time (cost of capital 8%) and a share exchange of 4 shares in Jamaica Limited for every 5 shares acquired in Barbados Limited. The market price for a Jamaica Limited share at that date was $2.80. To date the acquisition of Barbados Limited has not been recorded. On 1 July 2020 Jamaica Limited acquired 40,000 shares in Trinidad Limited for cash at a price of $2.20 per share. For the year ended 31 December 2019 Trinidad Limited reported a profit of $72,000 (assume profit accrued evenly during the year). Non-Current Assets Land Equipment Less Depreciation Me Vehicles Less Depreciation Investments Trinidad Ltd Current Assets Inventory Accounts receivable Prepayments Bank & cash EQUITY & LIABILITES $1 Ordinary shares Reserves General reserves Retained earnings Balance Sheet as at 31 December 2019 Jamaica Ltd $ Non-Current Liabilities 4% Debentures Current Liabilities Trade Payables Taxation 660, 000 24,000 550, 000 50,000 88,000 $ 145,000 173,000 1,200,000 336,000 300,000 1,836 000 445,000 320, 000 12,000 209,000 1,074, 000 2.910.000 1,200,000 170, 000 246, 000 976, 000 318,000 2.910.000 Barbados Ltd S S 100,000 10,000 000 40 000 25,000 40,000 7,000 40,000 8,000 38,000 300,000 90,000 160 000 550 000 112 000 662 000 200,000 30,000 24, 000 362,000 46.000 662.000 Trinidad Ltd S 70,000 10,000 30.000 15,000 8,000 2,000 13.000 15,000 7,000 $ 170,000 60,000 90,000 320,000 38,000 358,000 100,000 0 36,000 200,000 22,000 358.000

On December 18, 2020, Stephanie Corporation acquired 100 percent of a Swiss company for 4.004 million Swiss francs (CHF), which is indicative of book and fair value. At the acquisition date, the exchange rate was $1.00 = CHF 1. On December 18, 2020, the book and fair values of the subsidiary’s assets and liabilities were as follows:     Cash CHF 804,000   Inventory   1,304,000   Property, plant, and equipment   4,004,000   Notes payable   (2,108,000 )     Stephanie prepares consolidated financial statements on December 31, 2020. By that date, the Swiss franc has appreciated to $1.10 = CHF 1. Because of the year-end holidays, no transactions took place prior to consolidation.   Determine the translation adjustment to be reported on Stephanie’s December 31, 2020, consolidated balance sheet, assuming that the Swiss franc is the Swiss subsidiary’s functional currency. What is the economic relevance of this translation adjustment? Determine the remeasurement gain or loss…

On December 18, 2020, Stephanie Corporation acquired 100 percent of a Swiss company for 4.006 million Swiss francs (CHF), which is indicative of book and fair value. At the acquisition date, the exchange rate was $1.00 = CHF 1. On December 18, 2020, the book and fair values of the subsidiary's assets and liabilities were as follows: Cash CHF Inventory Property, plant, and equipment Notes payable 806,000 1,306,000 4,006,000 (2,112,000) Stephanie prepares consolidated financial statements on December 31, 2020. By that date, the Swiss franc has appreciated to $1.10 = CHF 1. Because of the year-end holidays, no transactions took place prior to consolidation. a. Determine the translation adjustment to be reported on Stephanie's December 31, 2020, consolidated balance sheet, assuming that the Swiss franc is the Swiss subsidiary's functional currency. What is the economic relevance of this translation adjustment? b. Determine the remeasurement gain or loss to be reported in Stephanie's 2020…

Christina Company (a U.S.-based company) has a subsidiary in Canada that began operations at the start of 2020 with assets of 143,000 Canadian dollars (CAD) and liabilities of CAD 76,000. During this initial year of operation, the subsidiary reported a profit of CAD 37,000. It distributed two dividends, each for CAD 6,100 with one dividend declared on March 1 and the other on October 1. Applicable U.S. dollar ($) exchange rates for 1 Canadian dollar follow: January 1, 2020 (start of business) March 1, 2020 Weighted average rate for 2020 October 1, 2020 December 31, 2020 $0.80 0.78 0.77 0.76 0.75 a. Assume that the Canadian dollar is this subsidiary's functional currency. What translation adjustment would the company report for the year 2020? b. Assume that on October 1, 2020, Christina entered into a forward exchange contract to hedge the net investment in this subsidiary. On that date, the company agreed to sell CAD 160,000 in three months at a forward exchange rate of $0.76/CAD1.…