51. Esposito is an Italian subsidiary of a U.S. company.
Esposito’s ending inventory is valued at the average cost for the last quarter of the
year.
The following account balances are available for Esposito for 2011:
Compute the cost of goods sold for 2011 in U.S. dollars using the current rate
method.
52. Esposito is an Italian subsidiary of a U.S. company.
Esposito’s ending inventory is valued at the average cost for the last quarter of the
year.
The following account balances are available for Esposito for 2011:
Compute ending inventory for 2011 under the temporal method.
53. Esposito is an Italian subsidiary of a U.S. company.
Esposito’s ending inventory is valued at the average cost for the last quarter of the
year.
The following account balances are available for Esposito for 2011:
Compute ending inventory for 2011 under the current rate method.
54. A foreign subsidiary uses the first-in first-out inventory method. The following
inventory balances are given at December 31, 2011 in local currency units (LCU):
Compute the December 31, 2011, inventory balance using the lower of cost or market
method under the temporal method.
55. A foreign subsidiary uses the first-in first-out inventory method. The following
inventory balances are given at December 31, 2011 in local currency units (LCU):
Compute the December 31, 2011, inventory balance using the current rate method.
56. Perez Company, a Mexican subsidiary of a U.S. company, sold equipment
costing 200,000 pesos with accumulated depreciation of 75,000 pesos for 140,000
pesos on March 1, 2011. The equipment was purchased on January 1, 2010. Relevant
exchange rates for the peso are as follows:
The financial statements for Perez are translated by its U.S. parent. What amount of
gain or loss would be reported in its translated income statement?
57. Perez Company, a Mexican subsidiary of a U.S. company, sold equipment
costing 200,000 pesos with accumulated depreciation of 75,000 pesos for 140,000
pesos on March 1, 2011. The equipment was purchased on January 1, 2010. Relevant
exchange rates for the peso are as follows:
The financial statements for Perez are remeasured by its U.S. parent. What amount of
gain or loss would be reported in its translated income statement?
58. Certain balance sheet accounts of a foreign subsidiary of Parker Company at
December 31, 2011, have been restated into U.S. dollars as follows:
Assuming the functional currency of the subsidiary is the U.S. dollar, what total
should be included in Parker’s consolidated balance sheet at December 31, 2011, for
the above items?
59. Certain balance sheet accounts of a foreign subsidiary of Parker Company at
December 31, 2011, have been restated into U.S. dollars as follows:
Assuming the functional currency of the subsidiary is the local currency, what total
should be included in Parker’s consolidated balance sheet at December 31, 2011, for
the above items?
60. Certain balance sheet accounts of a foreign subsidiary of Parker Company at
December 31, 2011, have been restated into U.S. dollars as follows:
If the current rate used to restate these amounts is $.95, what was the average
historical rate used to arrive at the total amount for historical rates?
61. Kennedy Company acquired all of the outstanding common stock of Hastie
Company of Canada for U.S. $350,000 on January 1, 2011, when the exchange rate
for the Canadian dollar (CAD) was U.S. $.70. The fair value of the net assets of
Hastie was equal to their book value of CAD 450,000 on the date of acquisition. Any
acquisition consideration excess over fair value was attributed to an unrecorded patent
with a remaining life of five years. The functional currency of Hastie is the Canadian
dollar.
For the year ended December 31, 2011, Hastie‘s trial balance net income was
translated at U.S. $25,000. The average exchange rate for the Canadian dollar during
2011 was U.S. $.68, and the 2011 year-end exchange rate was U.S. $.65.
Calculate the U.S. dollar amount allocated to the patent at January 1, 2011.
62. Kennedy Company acquired all of the outstanding common stock of Hastie
Company of Canada for U.S. $350,000 on January 1, 2011, when the exchange rate
for the Canadian dollar (CAD) was U.S. $.70. The fair value of the net assets of
Hastie was equal to their book value of CAD 450,000 on the date of acquisition. Any
acquisition consideration excess over fair value was attributed to an unrecorded patent
with a remaining life of five years. The functional currency of Hastie is the Canadian
dollar.
For the year ended December 31, 2011, Hastie’s trial balance net income was
translated at U.S. $25,000. The average exchange rate for the Canadian dollar during
2011 was U.S. $.68, and the 2011 year-end exchange rate was U.S. $.65.
Amortization of the patent, translated, for 2011 would be
63. Kennedy Company acquired all of the outstanding common stock of Hastie
Company of Canada for U.S. $350,000 on January 1, 2011, when the exchange rate
for the Canadian dollar (CAD) was U.S. $.70. The fair value of the net assets of
Hastie was equal to their book value of CAD 450,000 on the date of acquisition. Any
acquisition consideration excess over fair value was attributed to an unrecorded patent
with a remaining life of five years. The functional currency of Hastie is the Canadian
dollar.
For the year ended December 31, 2011, Hastie’s trial balance net income was
translated at U.S. $25,000. The average exchange rate for the Canadian dollar during
2011 was U.S. $.68, and the 2011 year-end exchange rate was U.S. $.65.
Compute the amount of the patent reported in the consolidated balance sheet at
December 31, 2011.
64. Kennedy Company acquired all of the outstanding common stock of Hastie
Company of Canada for U.S. $350,000 on January 1, 2011, when the exchange rate
for the Canadian dollar (CAD) was U.S. $.70. The fair value of the net assets of
Hastie was equal to their book value of CAD 450,000 on the date of acquisition. Any
acquisition consideration excess over fair value was attributed to an unrecorded patent
with a remaining life of five years. The functional currency of Hastie is the Canadian
dollar.
For the year ended December 31, 2011, Hastie’s trial balance net income was
translated at U.S. $25,000. The average exchange rate for the Canadian dollar during
2011 was U.S. $.68, and the 2011 year-end exchange rate was U.S. $.65.
Kennedy’s share of Hastie’s net income for 2011 would be
65. Quadros Inc., a Portuguese firm was acquired by a U.S. company on January 1,
2010. Selected account balances are available for the year ended December 31, 2011,
and are stated in euro, the local currency.
Relevant exchange rates for 1 euro are given below:
Assume the functional currency is the euro, compute the U.S. income statement
amount for sales for 2011.
66. Quadros Inc., a Portuguese firm was acquired by a U.S. company on January 1,
2010. Selected account balances are available for the year ended December 31, 2011,
and are stated in euro, the local currency.
Relevant exchange rates for 1 euro are given below:
Assume the functional currency is the euro, compute the U.S. balance sheet amount
for inventory at December 31, 2011.
67. Quadros Inc., a Portuguese firm was acquired by a U.S. company on January 1,
2010. Selected account balances are available for the year ended December 31, 2011,
and are stated in euro, the local currency.
Relevant exchange rates for 1 euro are given below:
Assume the functional currency is the euro, compute the U.S. balance sheet amount
for equipment for 2011.
68. Quadros Inc., a Portuguese firm was acquired by a U.S. company on January 1,
2010. Selected account balances are available for the year ended December 31, 2011,
and are stated in euro, the local currency.
Relevant exchange rates for 1 euro are given below:
Assume the functional currency is the euro, compute the U.S. statement of retained
earnings amount for dividends for 2011.