Chapter 12 – Multinational Accounting: Issues in Financial Reporting and Translation of Foreign Entity Statements
P12-23 Translation
a.
Western Ranching Company
Trial Balance Translation
December 31, 20X3
Australian
Exchange
U.S.
Dollars
Rate
Dollars
Cash
A$ 44,100
0.60
$ 26,460
Accounts Receivable (net)
72,000
0.60
43,200
Inventory
86,000
0.60
51,600
Plant and Equipment
240,000
0.60
144,000
Cost of Goods Sold
330,000
0.65
214,500
Depreciation Expense
24,000
0.65
15,600
Operating Expense
131,500
0.65
85,475
Interest Expense
5,700
0.65
3,705
Dividends Declared
9,000
0.67
6,030
Total
$590,570
Accumulated Other Comprehensive
Income — Translation Adjustment(debit)
16,760
Total Debits
A$942,300
$607,330
Accumulated Depreciation
A$ 60,000
0.60
$ 36,000
Accounts Payable
53,800
0.60
32,280
Payable to Alamo, Inc.
10,800
0.60
6,480
Interest Payable
3,000
0.60
1,800
12% Bonds Payable
100,000
0.60
60,000
Premium on Bonds
5,700
0.60
3,420
Common Stock
90,000
0.70
63,000
Retained Earnings
40,000
0.70
28,000
Sales
579,000
0.65
376,350
Total Credits
A$942,300
$607,330
Schedule to prove translation adjustment:
Exchange
Net assets at beginning of year
A$130,000
0.70
$ 91,000
Adjustments for changes:
Net income for year
0.65
Dividends paid
(9,000)
0.67
Net assets translated:
Rates during year
Rates at end of year
A$208,800
0.60
Change in other comprehensive
$ 16,760
Accumulated other comprehensive
Accumulated other comprehensive
Chapter 12 – Multinational Accounting: Issues in Financial Reporting and Translation of Foreign Entity Statements
P12-26 Remeasurement
a.
Western Ranching Company
Trial Balance Remeasurement
December 31, 20X3
Australian
Exchange
U.S.
Dollars
Rate
Dollars
Cash
A$ 44,100
0.60
$ 26,460
Accounts Receivable (net)
72,000
0.60
43,200
Inventory
86,000
0.65
55,900
Plant and Equipment
240,000
180,000 x 0.70
60,000 x 0.70
168,000
Cost of Goods Sold
330,000
(a)
217,800
Depreciation Expense
24,000
0.70
16,800
Operating Expense
131,500
0.65
85,475
Interest Expense
5,700
0.65
3,705
Dividends Declared
9,000
0.67
6,030
Total Debits
A$942,300
$623,370
Accumulated Depreciation
A$ 60,000
0.70
$ 42,000
Accounts Payable
53,800
0.60
32,280
Payable to Alamo, Inc.
10,800
0.60
6,480
Interest Payable
3,000
0.60
1,800
12% Bonds Payable
100,000
0.60
60,000
Premium on Bonds
5,700
0.60
3,420
Common Stock
90,000
0.70
63,000
Retained Earnings
40,000
0.70
28,000
Sales
579,000
0.65
376,350
Total
$613,330
Remeasurement Gain
10,040
Total Credits
A$942,300
$623,370
Australian
Exchange
U.S.
(a) Cost of Goods Sold:
Dollars
Rate
Dollars
Beginning Inventory
A$ 66,000
0.70
$ 46,200
Purchases
350,000
0.65
227,500
Goods Available
A$416,000
$273,700
Minus Ending Inventory
(86,000)
0.65
(55,900)
Cost of Goods Sold
A$330,000
$217,800
