Question 1

Under the temporal method, property, plant & equipment would be remeasured at what rate?

Accepted Answer

A)  Beginning of the year rate. 
B)  Average rate. 
C)  Current rate. 
D)  Historical rate. 
E)  Composite amount. 
A)  Beginning of the year rate. 
B)  Average rate. 
C)  Current rate. 
D)  Historical rate. 
E)  Composite amount. D

Question 2

Assume the functional currency is the Euro; compute the U.S.income statement amount for depreciation expense for 2018.

Accepted Answer

A)  $8,190. 
B)  $8,370. 
C)  $8,820. 
D)  $9,090. 
E)  $8,550. 
A)  $8,190. 
B)  $8,370. 
C)  $8,820. 
D)  $9,090. 
E)  $8,550. E

Question 3

Assume the functional currency is the Euro; compute the U.S.balance sheet amount for inventory at December 31, 2018.

Accepted Answer

A)  $18,800. 
B)  $19,600. 
C)  $18,000. 
D)  $20,200 
E)  $19,000. 
A)  $18,800. 
B)  $19,600. 
C)  $18,000. 
D)  $20,200 
E)  $19,000. D

Question 4

Prepare an income statement for this subsidiary in stickles and then translate these amounts into U.S.dollars.

Accepted Answer

The answer of Prepare an income statement for this subsidiary...

Question 5

Under what circumstances would the remeasurement of a foreign subsidiary's financial statements be required?

Accepted Answer

The remeasurement of a foreign subsidiar

Question 6

What is a company's functional currency?

Accepted Answer

A)  The currency of the primary economic environment in which it operates. 
B)  The currency of the country where it has its headquarters. 
C)  The currency in which it prepares its financial statements. 
D)  The reporting currency of its parent for a subsidiary. 
E)  The currency it chooses to designate as such. 
A)  The currency of the primary economic environment in which it operates. 
B)  The currency of the country where it has its headquarters. 
C)  The currency in which it prepares its financial statements. 
D)  The reporting currency of its parent for a subsidiary. 
E)  The currency it chooses to designate as such.

Question 7

A U.S.company's foreign subsidiary had the following amounts in stickles (§) in 2018:   The average exchange rate during 2018 was §1 = $.96.The beginning inventory was acquired when the exchange rate was §1 = $1.20.The ending inventory was acquired when the exchange rate was §1 = $.90.The exchange rate at December 31, 2018 was §1 = $.84.Assuming that the foreign country had a highly inflationary economy, at what amount should the foreign subsidiary's cost of goods sold have been reflected in the 2018 U.S.dollar income statement?

Accepted Answer

A)  $11,253,600. 
B)  $11,577,600. 
C)  $11,649,600. 
D)  $11,613,600. 
E)  $11,523,600. 
A)  $11,253,600. 
B)  $11,577,600. 
C)  $11,649,600. 
D)  $11,613,600. 
E)  $11,523,600.

Question 8

A net liability balance sheet exposure exists and the foreign currency appreciates.Which of the following statements is true?

Accepted Answer

A)  There is no translation adjustment. 
B)  There is a transaction loss. 
C)  There is a transaction gain. 
D)  There is a negative translation adjustment. 
E)  There is a positive translation adjustment. 
A)  There is no translation adjustment. 
B)  There is a transaction loss. 
C)  There is a transaction gain. 
D)  There is a negative translation adjustment. 
E)  There is a positive translation adjustment.

Question 9

Westmore reported sales of £1,500,000 during 2018.What amount (rounded) would have been included for this subsidiary in calculating consolidated sales?

Accepted Answer

A)  $2,415,000. 
B)  $2,400,000. 
C)  $2,385,000. 
D)  $ 943,396. 
E)  $ 931,677. 
A)  $2,415,000. 
B)  $2,400,000. 
C)  $2,385,000. 
D)  $ 943,396. 
E)  $ 931,677.

Question 10

Compute ending inventory for 2018 under the temporal method.

Accepted Answer

A)  $13,950. 
B)  $14,100. 
C)  $14,400. 
D)  $14,850. 
E)  $15,150. 
A)  $13,950. 
B)  $14,100. 
C)  $14,400. 
D)  $14,850. 
E)  $15,150.

Question 11

Perkle Co.owned a subsidiary in Belgium; the subsidiary's functional currency was the Belgian franc.During 2018, 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?

Accepted Answer

Any effect on the contract res

Question 12

Which method of translating a foreign subsidiary's financial statements is correct if it is assumed that the parent's net investment is exposed to foreign exchange risk?

Accepted Answer

A)  Historical rate method. 
B)  Working capital method. 
C)  Current rate method. 
D)  Remeasurement. 
E)  Temporal method. 
A)  Historical rate method. 
B)  Working capital method. 
C)  Current rate method. 
D)  Remeasurement. 
E)  Temporal method.

Question 13

Under the temporal method, depreciation expense would be remeasured at what rate?

Accepted Answer

A)  Beginning of the year rate. 
B)  Average rate. 
C)  Current rate. 
D)  Historical rate. 
E)  Composite amount. 
A)  Beginning of the year rate. 
B)  Average rate. 
C)  Current rate. 
D)  Historical rate. 
E)  Composite amount.

Question 14

According to U.S.GAAP, when the local currency is the functional currency, which method is usually required for translating a foreign subsidiary's financial statements into the parent's reporting currency?

Accepted Answer

A)  The temporal method. 
B)  The current rate method. 
C)  The current/noncurrent method. 
D)  The monetary/nonmonetary method. 
E)  The noncurrent rate method. 
A)  The temporal method. 
B)  The current rate method. 
C)  The current/noncurrent method. 
D)  The monetary/nonmonetary method. 
E)  The noncurrent rate method.

Question 15

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?

Accepted Answer

A)  $1,530. 
B)  $1,575. 
C)  $1,590. 
D)  $1,090. 
E)  $1,650. 
A)  $1,530. 
B)  $1,575. 
C)  $1,590. 
D)  $1,090. 
E)  $1,650.

Question 16

Assume that Boerkian was a foreign subsidiary of a U.S.multinational company and the U.S.dollar is the functional currency.On the December 31, 2018 balance sheet, what was the remeasured value of the Land account?

Accepted Answer

The answer of Assume that Boerkian was a foreign subsidiary...

Question 17

On December 31, 2018, Westmore had accounts receivable of £280,000.What amount (rounded) would have been included for this subsidiary in calculating consolidated accounts receivable?

Accepted Answer

A)  $173,913. 
B)  $176,100. 
C)  $445,200. 
D)  $448,000. 
E)  $450,800. 
A)  $173,913. 
B)  $176,100. 
C)  $445,200. 
D)  $448,000. 
E)  $450,800.

Question 18

Prepare a statement of cash flows for this subsidiary in stickles and then translate the amounts into U.S.dollars.

Accepted Answer

Ginvold Co. Subsidia

Question 19

A U.S.company's foreign subsidiary had the following amounts in stickles (§), the functional currency, in 2018:   The average exchange rate during 2018 was §1 = $.96.The beginning inventory was acquired when the exchange rate was §1 = $1.20.The ending inventory was acquired when the exchange rate was §1 = $.90.The exchange rate at December 31, 2018 was §1 = $.84.Assuming that the foreign nation for the subsidiary had a highly inflationary economy, at what amount should that foreign subsidiary's purchases have been reflected in the 2018 U.S.dollar income statement?

Accepted Answer

A)  $11,865,600. 
B)  $11,577,600. 
C)  $11,520,000. 
D)  $11,613,600. 
E)  $11,523,600. 
A)  $11,865,600. 
B)  $11,577,600. 
C)  $11,520,000. 
D)  $11,613,600. 
E)  $11,523,600.

Question 20

In translating a foreign subsidiary's financial statements, what exchange rate should be used for the subsidiary's revenues and expenses?

Accepted Answer

The historical rate that was in effect w

Exam 10: A: Translation of Foreign Currency Financial Statements

Under the temporal method, property, plant & equipment would be remeasured at what rate?

Assume the functional currency is the Euro; compute the U.S.income statement amount for depreciation expense for 2018.

Assume the functional currency is the Euro; compute the U.S.balance sheet amount for inventory at December 31, 2018.

Prepare an income statement for this subsidiary in stickles and then translate these amounts into U.S.dollars.

Under what circumstances would the remeasurement of a foreign subsidiary's financial statements be required?

What is a company's functional currency?

A net liability balance sheet exposure exists and the foreign currency appreciates.Which of the following statements is true?

Westmore reported sales of £1,500,000 during 2018.What amount (rounded) would have been included for this subsidiary in calculating consolidated sales?

Compute ending inventory for 2018 under the temporal method.

Perkle Co.owned a subsidiary in Belgium; the subsidiary's functional currency was the Belgian franc.During 2018, 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?

Which method of translating a foreign subsidiary's financial statements is correct if it is assumed that the parent's net investment is exposed to foreign exchange risk?

Under the temporal method, depreciation expense would be remeasured at what rate?

According to U.S.GAAP, when the local currency is the functional currency, which method is usually required for translating a foreign subsidiary's financial statements into the parent's reporting currency?

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?

Assume that Boerkian was a foreign subsidiary of a U.S.multinational company and the U.S.dollar is the functional currency.On the December 31, 2018 balance sheet, what was the remeasured value of the Land account?

On December 31, 2018, Westmore had accounts receivable of £280,000.What amount (rounded) would have been included for this subsidiary in calculating consolidated accounts receivable?

Prepare a statement of cash flows for this subsidiary in stickles and then translate the amounts into U.S.dollars.

In translating a foreign subsidiary's financial statements, what exchange rate should be used for the subsidiary's revenues and expenses?

The Equity Method of Accounting for Investments

A: the Equity Method of Accounting for Investments

Consolidation of Financial Information

A: Consolidation of Financial Information

Consolidations - Subsequent to the Date of Acquisition

A: Consolidations - Subsequent to the Date of Acquisition

Consolidated Financial Statements and Outside Ownership

A: Consolidated Financial Statements and Outside Ownership

Consolidated Financial Statements Intra-Entity Asset Transactions

A: Consolidated Financial Statements Intra-Entity Asset Transactions

Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

A: Variable Interest Entities, Intra-Entity Debt, Consolidated Cash Flows, and Other Issues

Consolidated Financial Statements - Ownership Patterns and Income Taxes

A: Consolidated Financial Statements - Ownership Patterns and Income Taxes

Segment and Interim Reporting

A: Segment and Interim Reporting

Foreign Currency Transactions and Hedging Foreign Exchange Risk

A: Foreign Currency Transactions and Hedging Foreign Exchange Risk

Translation of Foreign Currency Financial Statements

Worldwide Accounting Diversity and International Accounting Standards

A: Worldwide Accounting Diversity and International Accounting Standards

Financial Reporting and the Securities and Exchange Commission

A: Financial Reporting and the Securities and Exchange Commission

Accounting for Legal Reorganizations and Liquidations

A: Accounting for Legal Reorganizations and Liquidations

Partnerships: Formation and Operation

A: Partnerships: Formation and Operation

Partnerships: Termination and Liquidation

A: Partnerships: Termination and Liquidation

Accounting for State and Local Governments, Part I

A: Accounting for State and Local Governments, Part I

Accounting for State and Local Governments, Part II

A: Accounting for State and Local Governments, Part II

Accounting for Not-For-Profit Entities

A: Accounting for Not-For-Profit Entities

Accounting for Estates and Trusts

A: Accounting for Estates and Trusts

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