Soft Bound Version for Advanced Accounting 13th Edition
13th Edition
ISBN: 9781260110579
Author: Hoyle
Publisher: McGraw Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 10, Problem 28P
a.
To determine
Assume that NGN is the functional currency then what will be the translation adjustment in 2017.
b.
To determine
What is the amount as translation adjustment where functional currency is US Dollar?
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On
December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s):
Cash
Inventory
Land
Building
Accumulated
depreciation
2011
2013
August 1, 2019
December 31,
2019
February 1, 2020
May 1, 2020
June 1, 2020
August 1, 2020
September 1,
2020
NGN 16,790 Notes payable
Common stock
Retained.
11,900
earnings
The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock
in 2011. During 2020, the following transactions took place:
October 1, 2020
November 1, 2020
December 1, 2020
December 31,
2020
Average for 2020
4,190
41,900
(20,950)
NGN 53,830
2020
Feb. 1 Paid 8,190,000 NGN on the note payable.
May 1 Sold entire inventory for 17,900,000 NGN on account.
June 1 Sold land for 6,190,000 NGN cash.
Aug. 1 Collected all accounts receivable.
Sept. 1 Signed long-term note to receive 8,190,000 NGN…
Rolfe company (a US based company) has a subsidiary in Nigeria where the local currency unit is naira (NGN). On december 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands):
cash 16,750
Inventory 11,500
Lang 4,150
Building 41,500
Accumulate depreciation (20,750)
Note Payable 20,300
Common Stock 21,900
Retained Earnings 10,950
The subsidiary adquired the investory on Agust 1, 2016, and the land and building in 2010. It issued the common stock in 2008. During 2017, the following transactions took place:
Feb. 1 Paid 8,150,000 NGN on note payable
May 1 Sold entire inventory for 17,500,000 on account
June 1 Sold land for 6,150,000 cash
Aug. 1 collected all accounts receivable
Sept 1 signed long term note to receive 8,150,000 NGN cash
Oct 1 bought inventory for 20,150,000 NGN cash
Nov 1 Bought land for 3,150,000 NGN account
Dec 1 Declared and paid 3,150,000 NGN cash dividend to parent
Dec 31 Recorded depreciation for the entire year of 2,075,000 NGN
The US…
Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31,
2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]):
Cash
Inventory
Land
Building
Accumulated depreciation
NGN 15,670
10,300
4,030
40,300
(20,150)
NGN 50,150
Notes payable
Common stock
Retained earnings
2020
Feb. 1 Paid 8,030,000 NGN on the note payable.
May 1 Sold entire inventory for 16,300,000 NGN on account.
June 1 Sold land for 6,030,000 NGN cash.
Aug. 1 Collected all accounts receivable.
Sept. 1 Signed long-term note to receive 8,030,000 NGN cash.
Oct. 1 Bought inventory for 20,030,000 NGN cash.
Nov. 1 Bought land for 3,030,000 NGN on account.
NGN 20,060
20,060
10,030
The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During
2020, the following transactions took place:
Dec. 1 Declared and paid 3,030,000 NGN cash dividend to parent.
Dec.31…
Chapter 10 Solutions
Soft Bound Version for Advanced Accounting 13th Edition
Ch. 10 - Prob. 1QCh. 10 - What causes balance sheet (or translation)...Ch. 10 - Prob. 3QCh. 10 - Prob. 4QCh. 10 - Prob. 5QCh. 10 - Prob. 6QCh. 10 - Prob. 7QCh. 10 - Prob. 8QCh. 10 - Prob. 9QCh. 10 - Prob. 10Q
Ch. 10 - Prob. 11QCh. 10 - Which translation method does U.S. GAAP require...Ch. 10 - Prob. 13QCh. 10 - Prob. 1PCh. 10 - Prob. 2PCh. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Prob. 6PCh. 10 - Prob. 7PCh. 10 - Prob. 8PCh. 10 - What amount does Newberrys consolidated income...Ch. 10 - Prob. 10PCh. 10 - Prob. 11PCh. 10 - Prob. 12PCh. 10 - Prob. 13PCh. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 16PCh. 10 - Prob. 17PCh. 10 - A foreign subsidiarys functional currency is its...Ch. 10 - Prob. 19PCh. 10 - Prob. 20PCh. 10 - Prob. 21PCh. 10 - Prob. 22PCh. 10 - The following accounts are denominated in rubles...Ch. 10 - Prob. 24PCh. 10 - Prob. 25PCh. 10 - Sullivans Island Company began operating a...Ch. 10 - Prob. 27PCh. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 33PCh. 10 - The following account balances are for the Agee...Ch. 10 - Prob. 35PCh. 10 - Prob. 36PCh. 10 - Prob. 37PCh. 10 - Prob. 38PCh. 10 - Prob. 1DYSCh. 10 - RESEARCH CASE 2FOREIGN CURRENCY TRANSLATION...Ch. 10 - Prob. 3DYSCh. 10 - Prob. 4DYSCh. 10 - Prob. 5DYS
Knowledge Booster
Similar questions
- Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation 2011 2013 NGN 16,750 11,500 2020 Feb. 1 Paid 8,150,000 NGN on the note payable. May 1 Sold entire inventory for 17,500,000 NGN on account. June 1 Sold land for 6,150,000 NGN cash. Aug. 1 Collected all accounts receivable. August 1, 2019 December 31, 2019 February 1, 2020 May 1, 2020 June 1, 2020 August 1, 2020 September 1, 2020 October 1, 2020 November 1, 2020 December 1, 2020 December 31, 2020 Average for 2020 4,150 41,500 (20,750) NGN 53,150 The subsidiary acquired the Inventory on August 1, 2019, and the land and building in 2013. It Issued the common stock In 2011. During 2020, the following transactions took place: Sept. 1 Signed long-term note to receive 8,150,000 NGN cash. Oct. 1 Bought inventory for 20,150,000…arrow_forwardRolfe Company (a U.S.-based company) has a subsidiary In Nigeria, where the local currency unit is the naira (NGN). On December 31 2023, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation NGN 16,240 Notes payable 10,900 Common stock 4,090 Retained earnings 40,900 (20,450) NGN 51,680 NGN 20,180 21,000 10,500 NGN 51,680 The subsidiary Issued the common stock In 2015, and acquired the land and building in 2016. It acquired the Inventory on August 1, 2023. During 2024, the following transactions took place: 2824 February 1 Paid 8,090,000 NGN on the note payable. May 1 June 1 August 1 Sold entire inventory for 16,900,000 NGN on account. Sold land for 6,090,000 NGN cash. Collected all accounts receivable. September 1 Signed long-term note to receive 8,090,000 NGN cash. Bought inventory for 20,090,000 NGN cash. October 1 November 1 December 1 Bought land for 3,090,000 NGN on account. Declared and paid…arrow_forwardRolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation 2011 2013 2020 Feb. 1 Paid 8,140,000 NGN on the note payable. May 1 Sold entire inventory for 17,400,000 NGN on account. June 1 Sold land for 6,140,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept. 1 Signed long-term note to receive 8,140,000 NGN cash. Oct. 1 Bought inventory for 20,140,000 NGN cash. Nov. 1 Bought land for 3,140,000 NGN on account. Dec. 1 Declared and paid 3, 140,000 NGN cash dividend to parent. Dec.31 Recorded depreciation for the entire year of 2,070,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: August 1, 2019 December 31, 2019. February 1, 2020 May 1, 2020 June 1, 2020 August 1, 2020 September 1, 2020 October 1, 2020 November 1, 2020 December 1, 2020 December 31,…arrow_forward
- Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation 2011 2013 2020 Feb. 1 Paid 8,120,000 NGN on the note payable. May 1 Sold entire inventory for 17,200,000 NGN on account. June 1 Sold land for 6,120,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept. 1 Signed long-term note to receive 8,120,000 NGN cash. Oct. 1 Bought inventory for 20,120,000 NGN cash. Nov. 1 Bought land for 3,120,000 NGN on account. Dec. 1 Declared and paid 3,120,000 NGN cash dividend to parent. Dec.31 Recorded depreciation for the entire year of 2,060,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: August 1, 2019 December 31, 2019 February 1, 2020 May 1, 2020 June 1, 2020 August 1, 2020 September 1, 2020 October 1, 2020 November 1, 2020 December 1, 2020 December 31,…arrow_forwardRolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash NGN 16,240 Notes payable NGN 20,180 Inventory 10,900 Common stock 21,000 Land 4,090 Retained earnings 10,500 Building 40,900 Accumulated depreciation (20,450 ) NGN 51,680 NGN 51,680 The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During 2020, the following transactions took place: 2020 Feb. 1 Paid 8,090,000 NGN on the note payable. May 1 Sold entire inventory for 16,900,000 NGN on account. June 1 Sold land for 6,090,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept. 1 Signed long-term note to receive 8,090,000 NGN cash. Oct. 1 Bought inventory for 20,090,000 NGN cash. Nov. 1…arrow_forwardRolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash NGN 16,800 Notes payable NGN 20,400 Inventory 12,000 Common stock 22,400 Land 4,200 Retained earnings 11,200 Building 42,000 Accumulated depreciation (21,000 ) NGN 54,000 NGN 54,000arrow_forward
- Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash NGN 15,120 Notes payable NGN 20,160 Inventory 10,800 Common stock 20,160 Land 4,080 Retained earnings 10,080 Building 40,800 Accumulated depreciation (20,400 ) NGN 50,400 NGN 50,400 The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During 2020, the following transactions took place: 2020 Feb. 1 Paid 8,080,000 NGN on the note payable. May 1 Sold entire inventory for 16,800,000 NGN on account. June 1 Sold land for 6,080,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept. 1 Signed long-term note to receive 8,080,000 NGN cash. Oct. 1 Bought inventory for 20,080,000 NGN cash. Nov. 1…arrow_forwardA subsidiary of Cadbury Corp. located in a foreign country whose functional currency is the foreign currency. The subsidiary acquires inventory on credit on November 1, 2015, for 100,000 foreign currencies (F) that is sold on January 17, 2016 for 130,000 foreign currencies (FC). The subsidiary pays for the inventory on January 31, 2016. Currency exchange rates for 1 foreign currency (FC) are as follows:November 1, 2015 P 0.16 = 1 FCNovember 31, 2015 0.17 = 1November 17, 2016 0.18 = 1January 31, 2016 0.19 = 1Average for 2016 0.20 = 14. What amount does Cadbury’s consolidated balance sheet report for this inventory at December 31, 2015?A. P 16,000 B. P 17,000 C. P 18,000 D. P 19,0005. What amount does Cadbury’s consolidated income statement report for cost of goods sold for the year ending December 31, 2016?A. P 16,000 B. P 17,000 C. P 18,000 D. P 19,000arrow_forwardBoard Company has a foreign subsidiary that began operations at the start of 2017 with assets of 132,000 kites (the local currency unit) and liabilities of 54,000 kites. During this initial year of operation, the subsidiary reported a profit of 26,000 kites. It distributed two dividends, each for 5,000 kites with one dividend declared on March 1 and the other on October 1. Applicable exchange rates for 1 kite follow: January 1, 2017 (start of business). . . . . . . . . . $0.80March 1, 2017. . . . . . . . . . . . 0.78Weighted average rate for 2017. . 0.77October 1, 2017. . . . . . . . . . . . . 0.76December 31, 2017. . . . . . . . .. . 0.75 a. Assume that the kite is this subsidiary’s functional currency. What translation adjustment would Board report for the year 2017?b. Assume that on October 1, 2017, Board entered into a forward exchange contract to hedge the net investment in this subsidiary. On that date, Board agreed to sell 200,000 kites in three months at a forward exchange…arrow_forward
- Board Company has a foreign subsidiary that began operations at the start of 2017 with assets of 144,000 kites (the local currency unit) and liabilities of 78,000. During this initial year of operation, the subsidiary reported a profit of 38,000 kites. It distributed two dividends, each for 6,200 kites with one dividend declared on March 1 and the other on October 1. Applicable exchange rates for 1 kite follow: January 1, 2017 (start of business) $0.81 March 1, 2017 0.79 Weighted average rate for 2017 0.78 October 1, 2017 0.77 December 31, 2017 0.76 Assume that the kite is this subsidiary’s functional currency. What translation adjustment would Board report for the year 2017? Assume that on October 1, 2017, Board entered into a forward exchange contract to hedge the net investment in this subsidiary. On that date, Board agreed to sell 170,000 kites in three months at a forward exchange rate of $0.77/1 kite. Prepare the journal entries required by this…arrow_forwardRolfe Company (a U.S.-based company) has a subsidiary in Nigeria, where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash Inventory Land Building Accumulated depreciation 2020 Feb. 1 Paid 8,000,000 NGN on the note payable. May 1 Sold entire inventory for 16,000,000 NGN on account. June 1 Sold land for 6,000,000 NGN cash. Aug. 1 Collected all accounts receivable. 2011 2013 The subsidiary acquired the Inventory on August 1, 2019, and the land and building in 2013. It Issued the common stock in 2011. During 2020, the following transactions took place: Sept. 1 signed long-term note to receive 8,00e,eee NGN cash. oct. 1 Bought inventory for 20,000,000 NGN cash. Nov. 1 Bought land for 3,000,000 NGN on account. Dec. 1 Declared and paid 3,000,000 NGN cash dividend to parent. Dec.31 Recorded depreciation for the entire year of 2,000,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as…arrow_forwardRolfe Company (a U.S.-based company) has a subsidiary in Nigeria, where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash NGN 16,000 Notes payable NGN 20,000 Inventory 10,000 Common stock 20,000 Land 4,000 Retained earnings 10,000 Building 40,000 Accumulated depreciation (20,000 ) NGN 50,000 NGN 50,000 The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During 2020, the following transactions took place: 2020 Feb. 1 Paid 8,000,000 NGN on the note payable. May 1 Sold entire inventory for 16,000,000 NGN on account. June 1 Sold land for 6,000,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept. 1 Signed long-term note to receive 8,000,000 NGN cash. Oct. 1 Bought inventory for 20,000,000 NGN cash. Nov. 1…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,
Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSON
Intermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill Education
Financial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education