Question 1

Amortization of the patent, translated, for 2018 would be

Accepted Answer

A)  $ 7,000. 
B)  $10,000. 
C)  $ 6,800. 
D)  $ 9,000. 
E)  $ 6,500. 
A)  $ 7,000. 
B)  $10,000. 
C)  $ 6,800. 
D)  $ 9,000. 
E)  $ 6,500.

Question 2

What is the justification for the remeasurement of foreign currency transactions?

Accepted Answer

Remeasurement is needed for transactions

Question 3

Under the temporal method, common stock 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 4

Which method is used for remeasuring a foreign subsidiary's financial statements?

Accepted Answer

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

Question 5

Sinkal Co.was formed on January 1, 2018 as a wholly owned foreign subsidiary of a U.S.corporation.Sinkal's functional currency was the stickle (§).The following transactions and events occurred during 2018:   What was the amount of the translation adjustment for 2018?

Accepted Answer

A)  $52,000 decrease in relative value of net assets. 
B)  $60,400 decrease in relative value of net assets. 
C)  $60,400 increase in relative value of net assets. 
D)  $440,000 decrease in relative value of net assets. 
E)  $26,000 increase in relative value of net assets. 
A)  $52,000 decrease in relative value of net assets. 
B)  $60,400 decrease in relative value of net assets. 
C)  $60,400 increase in relative value of net assets. 
D)  $440,000 decrease in relative value of net assets. 
E)  $26,000 increase in relative value of net assets.

Question 6

Under the temporal method, retained earnings 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 7

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, 2018, for the above items?

Accepted Answer

A)  $407,500. 
B)  $418,000. 
C)  $396,000. 
D)  $403,500. 
E)  $398,500. 
A)  $407,500. 
B)  $418,000. 
C)  $396,000. 
D)  $403,500. 
E)  $398,500.

Question 8

When using the current rate method, the translation adjustment from translating a foreign subsidiary's financial statements should be shown as

Accepted Answer

A)  An asset or liability (depending on the balance) in the consolidated balance sheet. 
B)  A revenue or expense (depending on the balance) in the consolidated income statement. 
C)  A component of stockholders' equity in the consolidated balance sheet. 
D)  A component of cash flows from financing activities in the consolidated statement of cash flows. 
E)  An element of the notes which accompany the consolidated financial statements. 
A)  An asset or liability (depending on the balance) in the consolidated balance sheet. 
B)  A revenue or expense (depending on the balance) in the consolidated income statement. 
C)  A component of stockholders' equity in the consolidated balance sheet. 
D)  A component of cash flows from financing activities in the consolidated statement of cash flows. 
E)  An element of the notes which accompany the consolidated financial statements.

Question 9

For a foreign subsidiary that uses the U.S.dollar as its functional currency, what method is required to ready the financial statements for consolidation?

Accepted Answer

A)  Current/Noncurrent Method. 
B)  Monetary/Nonmonetary Method. 
C)  Current Rate Method. 
D)  Temporal Method. 
E)  Indirect Method. 
A)  Current/Noncurrent Method. 
B)  Monetary/Nonmonetary Method. 
C)  Current Rate Method. 
D)  Temporal Method. 
E)  Indirect Method.

Question 10

Compute the December 31, 2018, inventory balance using the lower of cost or net realizable value method under the temporal method.

Accepted Answer

A)  $321,000. 
B)  $457,600. 
C)  $596,400. 
D)  $454,400. 
E)  $419,000. 
A)  $321,000. 
B)  $457,600. 
C)  $596,400. 
D)  $454,400. 
E)  $419,000.

Question 11

Calculate the U.S.dollar amount allocated to the patent at January 1, 2018.

Accepted Answer

A)  $50,000. 
B)  $35,000. 
C)  $34,000. 
D)  $32,500. 
E)  $28,200. 
A)  $50,000. 
B)  $35,000. 
C)  $34,000. 
D)  $32,500. 
E)  $28,200.

Question 12

What exchange rate would be used to translate the asset and liability account balances of a foreign subsidiary when the local currency is the functional currency? What justification can be given for using this exchange rate?

Accepted Answer

Assets and liabilities are translated us

Question 13

In accounting, the term translation refers to

Accepted Answer

A)  The calculation of gains or losses from hedging transactions. 
B)  The calculation of exchange rate gains or losses on individual transactions in foreign currencies. 
C)  The procedure required to identify a company's functional currency. 
D)  The calculation of gains or losses from all transactions for the year. 
E)  A procedure to prepare a foreign subsidiary's financial statements for consolidation. 
A)  The calculation of gains or losses from hedging transactions. 
B)  The calculation of exchange rate gains or losses on individual transactions in foreign currencies. 
C)  The procedure required to identify a company's functional currency. 
D)  The calculation of gains or losses from all transactions for the year. 
E)  A procedure to prepare a foreign subsidiary's financial statements for consolidation.

Question 14

If the U.S.dollar is the functional currency of this subsidiary, what total amount should be included in Tulip's balance sheet in U.S.dollars?

Accepted Answer

A)  $609,000. 
B)  $658,000. 
C)  $602,000. 
D)  $630,000. 
E)  $616,000. 
A)  $609,000. 
B)  $658,000. 
C)  $602,000. 
D)  $630,000. 
E)  $616,000.

Question 15

In translating a foreign subsidiary's financial statements, which exchange rate does the current method require for the subsidiary's assets and liabilities?

Accepted Answer

A)  The exchange rate in effect when each asset or liability was acquired. 
B)  The average exchange rate for the current year. 
C)  A calculated exchange rate based on market value. 
D)  The exchange rate in effect as of the balance sheet date. 
E)  The exchange rate in effect at the start of the current year. 
A)  The exchange rate in effect when each asset or liability was acquired. 
B)  The average exchange rate for the current year. 
C)  A calculated exchange rate based on market value. 
D)  The exchange rate in effect as of the balance sheet date. 
E)  The exchange rate in effect at the start of the current year.

Question 16

When preparing a consolidation worksheet for a parent and its foreign subsidiary accounted for under the equity method, which of the following statements is false?

Accepted Answer

A)  The cumulative translation adjustment included in the Investment in Subsidiary account is eliminated. 
B)  The excess of fair value over book value since the date of acquisition is revalued for the change in exchange rate. 
C)  The amount of equity income recognized by the parent in the current year is eliminated. 
D)  The allocations of excess of fair value over book value at the date of acquisition are eliminated. 
E)  The subsidiary's stockholders' equity accounts as of the beginning of the year are eliminated. 
A)  The cumulative translation adjustment included in the Investment in Subsidiary account is eliminated. 
B)  The excess of fair value over book value since the date of acquisition is revalued for the change in exchange rate. 
C)  The amount of equity income recognized by the parent in the current year is eliminated. 
D)  The allocations of excess of fair value over book value at the date of acquisition are eliminated. 
E)  The subsidiary's stockholders' equity accounts as of the beginning of the year are eliminated.

Question 17

Compute the December 31, 2018, inventory balance using the current rate method.

Accepted Answer

A)  $454,400. 
B)  $457,600. 
C)  $596,400. 
D)  $419,000. 
E)  $321,000. 
A)  $454,400. 
B)  $457,600. 
C)  $596,400. 
D)  $419,000. 
E)  $321,000.

Question 18

An historical exchange rate for common stock of a foreign subsidiary is best described as

Accepted Answer

A)  The rate at date of the acquisition business combination. 
B)  The rate when the common stock was originally issued for the acquisition transaction. 
C)  The average rate from date of acquisition to the date of the balance sheet. 
D)  The rate from the prior year's balances. 
E)  The January 1 exchange rate. 
A)  The rate at date of the acquisition business combination. 
B)  The rate when the common stock was originally issued for the acquisition transaction. 
C)  The average rate from date of acquisition to the date of the balance sheet. 
D)  The rate from the prior year's balances. 
E)  The January 1 exchange rate.

Question 19

Compute the amount of the patent reported in the consolidated balance sheet at December 31, 2018.

Accepted Answer

A)  $28,200. 
B)  $25,700. 
C)  $35,000. 
D)  $27,200. 
E)  $26,000. 
A)  $28,200. 
B)  $25,700. 
C)  $35,000. 
D)  $27,200. 
E)  $26,000.

Question 20

Gunther Co.established a subsidiary in Mexico on January 1, 2018.The subsidiary engaged in the following transactions during 2018:   What amount of foreign exchange gain or loss would have been recognized in Gunther's consolidated income statement for 2018?

Accepted Answer

A)  $800,000 gain. 
B)  $760,000 gain. 
C)  $320,000 loss. 
D)  $280,000 loss. 
E)  $440,000 loss. 
A)  $800,000 gain. 
B)  $760,000 gain. 
C)  $320,000 loss. 
D)  $280,000 loss. 
E)  $440,000 loss.

Exam 10: A: Translation of Foreign Currency Financial Statements

Amortization of the patent, translated, for 2018 would be

What is the justification for the remeasurement of foreign currency transactions?

Under the temporal method, common stock would be remeasured at what rate?

Which method is used for remeasuring a foreign subsidiary's financial statements?

Sinkal Co.was formed on January 1, 2018 as a wholly owned foreign subsidiary of a U.S.corporation.Sinkal's functional currency was the stickle (§).The following transactions and events occurred during 2018: What was the amount of the translation adjustment for 2018?

Under the temporal method, retained earnings would be remeasured at what rate?

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, 2018, for the above items?

When using the current rate method, the translation adjustment from translating a foreign subsidiary's financial statements should be shown as

For a foreign subsidiary that uses the U.S.dollar as its functional currency, what method is required to ready the financial statements for consolidation?

Compute the December 31, 2018, inventory balance using the lower of cost or net realizable value method under the temporal method.

Calculate the U.S.dollar amount allocated to the patent at January 1, 2018.

What exchange rate would be used to translate the asset and liability account balances of a foreign subsidiary when the local currency is the functional currency? What justification can be given for using this exchange rate?

In accounting, the term translation refers to

If the U.S.dollar is the functional currency of this subsidiary, what total amount should be included in Tulip's balance sheet in U.S.dollars?

In translating a foreign subsidiary's financial statements, which exchange rate does the current method require for the subsidiary's assets and liabilities?

When preparing a consolidation worksheet for a parent and its foreign subsidiary accounted for under the equity method, which of the following statements is false?

Compute the December 31, 2018, inventory balance using the current rate method.

An historical exchange rate for common stock of a foreign subsidiary is best described as

Compute the amount of the patent reported in the consolidated balance sheet at December 31, 2018.

Gunther Co.established a subsidiary in Mexico on January 1, 2018.The subsidiary engaged in the following transactions during 2018: What amount of foreign exchange gain or loss would have been recognized in Gunther's consolidated income statement for 2018?

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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