Advanced Financial Accounting
11th Edition
ISBN: 9780078025877
Author: Theodore E. Christensen, David M Cottrell, Cassy JH Budd Advanced Financial Accounting
Publisher: McGraw-Hill Education
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Question
Chapter 12, Problem 12.1.2E
To determine
Introduction: Translation is the method used to convert financial results of the business of subsidiary company into the functional currency of parent company.
Re-measurement: It is process to measure the financial results of any other currency into functional currency.
To choose: The correct option.
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Certain balance sheet accounts of a foreign subsidiary of Paul Inc. at December 31, year 1, have been translated in US dollars as follows:
Translated at
Current Rates Historical Rates
Note recievable, long term P 240,000 P 200,000
Prepaid rent 85,000 80,000
Patent 150,000 170,000
P 475,000 P 450,000
The subsidiary's functional currency is…
Certain balance sheet accounts of a foreign subsidiary of Orchid Company have been stated in U.S. dollars as follows:
Stated at
Accounts receivable, current
Accounts receivable, long term
Land
Patents
Multiple Choice
Problem 10-7 (Algo) (LO 10-2, 10-4)
This subsidiary's functional currency is the U.S. dollar. What total should Orchid's balance sheet include for the preceding items?
O $462.000
Current Rates
$ 150,000
102,000
51,000
80,000
$383,000
$383.000
Historical Rates
$ 170,000
172,000
55,000
85,000
$ 482,000
ASSUME THAT THE LOCAL CURRENCY UNIT IS THE FUNCTIONAL CURRENCY.
Cade Inc. had a debit adjustment of $6400 for the year ended December 31, 2019, from restating its foreign
subsidiary's accounts from their local currency units into U.S. dollars.
Additionally, Cade had a receivable from a foreign customer. It is denominated in the customer's local currency. On
December 31, 2018, this receivable for 300,000 local currency units (LCU) was correctly included in Cade's balance
sheet at $121000. When the receivable was collected on February 15, 2019, the U.S. dollar-equivalent was $123800.
In Cade's 2019 consolidated statement of income, how much should be reported as foreign exchange gain/(loss) in
computing net income?
BE SURE TO TYPE A SIMPLE NUMBER WITH NO COMMAS OR DOLLAR SIGNS. FOR EXAMPLE, TYPE 1000 INSTEAD OF
$1,000.
IF THE NUMBER IS NEGATIVE, TYPE -1000 INSTEAD OF ($1,000)
Your Answer:
Chapter 12 Solutions
Advanced Financial Accounting
Ch. 12 - Prob. 12.1QCh. 12 - Prob. 12.2QCh. 12 - Prob. 12.3QCh. 12 - How widely used are IFRS? Can IFRS be used for...Ch. 12 - Prob. 12.5QCh. 12 - Prob. 12.6QCh. 12 - Prob. 12.7QCh. 12 - Prob. 12.8QCh. 12 - Prob. 12.9QCh. 12 - Prob. 12.10Q
Ch. 12 - Prob. 12.11QCh. 12 - Prob. 12.12QCh. 12 - Prob. 12.13QCh. 12 - Prob. 12.14QCh. 12 - Prob. 12.15QCh. 12 - Prob. 12.16QCh. 12 - Prob. 12.17QCh. 12 - Prob. 12.18QCh. 12 - Prob. 12.19QCh. 12 - Prob. 12.20QCh. 12 - Prob. 12.4CCh. 12 - Prob. 12.5CCh. 12 - Prob. 12.6CCh. 12 - Prob. 12.7CCh. 12 - Prob. 12.1.1ECh. 12 - Prob. 12.1.2ECh. 12 - Prob. 12.1.3ECh. 12 - Prob. 12.1.4ECh. 12 - Prob. 12.1.5ECh. 12 - Prob. 12.1.6ECh. 12 - Prob. 12.1.7ECh. 12 - Prob. 12.2.1ECh. 12 - Prob. 12.2.2ECh. 12 - Prob. 12.2.3ECh. 12 - Prob. 12.2.4ECh. 12 - Prob. 12.2.5ECh. 12 - Prob. 12.2.6ECh. 12 - Prob. 12.3ECh. 12 - Prob. 12.4.1ECh. 12 - Prob. 12.4.2ECh. 12 - Prob. 12.4.3ECh. 12 - Prob. 12.4.4ECh. 12 - Prob. 12.4.5ECh. 12 - Prob. 12.4.6ECh. 12 - Prob. 12.4.7ECh. 12 - Prob. 12.5ECh. 12 - Prob. 12.6ECh. 12 - Prob. 12.7ECh. 12 - Prob. 12.8ECh. 12 - Translation with Strengthening U.S. Dollar Refer...Ch. 12 - Remeasurement with Strengthening U.S. Dollar Refer...Ch. 12 - Prob. 12.11ECh. 12 - Prob. 12.12ECh. 12 - Prob. 12.13ECh. 12 - Prob. 12.14ECh. 12 - Prob. 12.15ECh. 12 - Prob. 12.16PCh. 12 - Prob. 12.17PCh. 12 - Prob. 12.18PCh. 12 - Proof of Translation Adjustment Refer to the...Ch. 12 - Prob. 12.20PCh. 12 - Prob. 12.21PCh. 12 - Remeasurement and Proof of Remeasurement Gain or...Ch. 12 - Prob. 12.23PCh. 12 - Prob. 12.24PCh. 12 - Prob. 12.25PCh. 12 - Prob. 12.26PCh. 12 - Prob. 12.27PCh. 12 - Prob. 12.28PCh. 12 - Prob. 12.29PCh. 12 - Prob. 12.30PCh. 12 - Prob. 12.31PCh. 12 - Prob. 12.32PCh. 12 - Prob. 12.33P
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