69. 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 accumulated depreciation for 2011.
70. 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 depreciation expense for 2011.
71. 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 U.S. dollar, compute the U.S. income statement
amount for sales for 2011.
72. 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 U.S. dollar, compute the U.S. balance sheet
amount for inventory, at cost, for 2011.
73. 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 U.S. dollar, compute the U.S. balance sheet
amount for equipment for 2011.
74. 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 U.S. dollar, compute the U.S. statement of
retained earnings amount for dividends for 2011.
75. 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 U.S. dollar, compute the U.S. balance sheet
amount for accumulated depreciation for 2011.
76. 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 U.S. dollar, compute the U.S. income statement
amount for depreciation expense for 2011.
77. A foreign subsidiary was acquired on January 1, 2011. Determine the exchange
rate used to restate the following accounts at December 31, 2011. Land was purchased
on October 1, 2011. Relevant exchange dates follow:
(A) January 1, 2011
(B) October 1, 2011
(C) December 31, 2011
(D) Average, 2011
(E) Composite, using multiple dates.
Identify the exchange rate used to translate items 1-5 when the functional currency is
the foreign currency:
____ 1. Land.
____ 2. Equipment.
____ 3. Bonds payable.
____ 4. Common stock.
____ 5. Retained earnings.
Identify the exchange rate used to remeasure the items 6-10 when the functional
currency is the U.S. dollar:
____ 6. Land.
____ 7. Equipment.
____ 8. Bonds payable.
____ 9. Common stock.
____ 10. Retained earnings.
78. In translating a foreign subsidiary‘s financial statements, what exchange rate
should be used for the subsidiary’s revenues and expenses?
79. How can a parent corporation determine the functional currency for a foreign
subsidiary that conducts business in more than one country?
80. What exchange rate should be used to translate (a) revenues and expenses that
occur throughout the year and (b) a gain or loss that occurs on a specific day?
81. Perkle Co. owned a subsidiary in Belgium; the subsidiary’s functional currency
was the Belgian franc. During 2011, Perkle engaged in hedging transactions to offset
part of the subsidiary’s net asset position. How should the effects of exchange rate
fluctuations on the currency hedge be accounted for?
82. Under what circumstances would the remeasurement of a foreign subsidiary’s
financial statements be required?
The remeasurement of a foreign subsidiary’s financial statements is required in the
following situations: