Question 1

What was the amount of the translation adjustment for 2018?

Accepted Answer

A)  $60,800 decrease in relative value of net assets 
B)  $60,800 decrease in relative value of net assets. 
C)  $61,200 decrease in relative value of net assets 
D)  $466,400 increase in relative value of net assets 
E)  $26,000 increase in relative value of net assets. 
A)  $60,800 decrease in relative value of net assets 
B)  $60,800 decrease in relative value of net assets. 
C)  $61,200 decrease in relative value of net assets 
D)  $466,400 increase in relative value of net assets 
E)  $26,000 increase in relative value of net assets.

Question 2

Under the temporal method, how would cost of goods sold be remeasured?

Accepted Answer

A)  Beginning of the year rate. 
B)  Average rate. 
C)  Current rate. 
D)  A single historical rate. 
E)  Historical rates. 
A)  Beginning of the year rate. 
B)  Average rate. 
C)  Current rate. 
D)  A single historical rate. 
E)  Historical rates.

Question 3

Contrast the purpose of remeasurement with the purpose of translation.

Accepted Answer

The purpose of translation is to transfo

Question 4

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

Accepted Answer

Ginvold Co. Subsidia

Question 5

On January 1, 2018, Fandu Corp.began operations of a foreign subsidiary.On April 1, 2018, the subsidiary purchased inventory costing 150,000 stickles.One-fourth of this inventory remained unsold at the end of 2018 while 40% of the liability from the purchase had not yet been paid.The pertinent indirect exchange rates were:
   Required:
What should have been the December 31, 2018 inventory and accounts payable balances for this foreign subsidiary as translated into U.S.dollars? (Round your answers to the nearest whole dollar.)

Accepted Answer

The answer of On January 1, 2018, Fandu Corp.began operations...

Question 6

Assume the functional currency is the Euro; compute the U.S.Statement of Retained Earnings amount reported for Dividends in 2018.

Accepted Answer

A)  $19,000. 
B)  $20,200. 
C)  $18,600. 
D)  $19,400. 
E)  $19,600. 
A)  $19,000. 
B)  $20,200. 
C)  $18,600. 
D)  $19,400. 
E)  $19,600.

Question 7

Under the temporal method, which accounts are remeasured using current exchange rates?

Accepted Answer

A)  All revenues and expenses. 
B)  All assets and liabilities. 
C)  Cash, receivables, and most liabilities. 
D)  All current assets and deferred income. 
E)  All stockholders' equity. 
A)  All revenues and expenses. 
B)  All assets and liabilities. 
C)  Cash, receivables, and most liabilities. 
D)  All current assets and deferred income. 
E)  All stockholders' equity.

Question 8

Assume the functional currency is the U.S.Dollar; compute the U.S.income statement amount for sales for 2018.

Accepted Answer

A)  $364,000. 
B)  $372,000. 
C)  $380,000. 
D)  $360,000. 
E)  $404,000. 
A)  $364,000. 
B)  $372,000. 
C)  $380,000. 
D)  $360,000. 
E)  $404,000.

Question 9

Which one of the following statements would justify this conclusion?

Accepted Answer

A)  Most of the subsidiary's sales and purchases were with companies in the U.S. 
B)  Dilty's functional currency is the dollar and Dilty is the parent. 
C)  Dilty's other subsidiaries all had the dollar as their functional currency. 
D)  Generally accepted accounting principles require that the subsidiary's functional currency must be the dollar if consolidated financial statements are to be prepared. 
E)  Dilty is located in the U.S. 
A)  Most of the subsidiary's sales and purchases were with companies in the U.S. 
B)  Dilty's functional currency is the dollar and Dilty is the parent. 
C)  Dilty's other subsidiaries all had the dollar as their functional currency. 
D)  Generally accepted accounting principles require that the subsidiary's functional currency must be the dollar if consolidated financial statements are to be prepared. 
E)  Dilty is located in the U.S.

Question 10

A foreign subsidiary of a U.S.corporation purchased equipment on January 4, 2015.
(A.) How would depreciation expense on the equipment be translated for 2018?
(B.) How would depreciation expense on the equipment be remeasured for 2018?

Accepted Answer

(A.) Depreciation expense would be trans

Question 11

What must Dilty do to ready the subsidiary's financial statements for consolidation?

Accepted Answer

A)  First translate, then remeasure them. 
B)  First remeasure, then translate them. 
C)  State all of the subsidiary's accounts in U.S. dollars using the exchange rate in effect at the balance sheet date. 
D)  Translate them. 
E)  Remeasure them. 
A)  First translate, then remeasure them. 
B)  First remeasure, then translate them. 
C)  State all of the subsidiary's accounts in U.S. dollars using the exchange rate in effect at the balance sheet date. 
D)  Translate them. 
E)  Remeasure them.

Question 12

Assume Boerkian was a foreign subsidiary of a U.S.multinational company and the U.S.dollar was the functional currency of the subsidiary.Prepare a schedule of changes in the net monetary assets of Boerkian for the year 2018 and properly label the resulting gain or loss.

Accepted Answer

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

Question 13

Under the current rate method, how would cost of goods sold be translated?

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

Required:
Assume that Boerkian was a foreign subsidiary of a U.S.multinational company and the local currency of the subsidiary (stickle) is the functional currency.On the December 31, 2018 balance sheet, what was the translated value of the Land account?

Accepted Answer

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

Question 15

If the subsidiary's local currency is its functional currency, 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 16

Assume the functional currency is the Euro; compute the U.S.balance sheet amount for equipment for 2018.

Accepted Answer

A)  $81,900. 
B)  $90,900. 
C)  $83,700. 
D)  $88,200. 
E)  $85,500. 
A)  $81,900. 
B)  $90,900. 
C)  $83,700. 
D)  $88,200. 
E)  $85,500.

Question 17

When consolidating a foreign subsidiary, which of the following statements is true?

Accepted Answer

A)  Parent reports a cumulative translation adjustment from adjusting its investment account under the equity method. 
B)  Parent reports a gain or loss in net income from adjusting its investment account under the equity method. 
C)  Subsidiary's cumulative translation adjustment is carried forward to the consolidated balance sheet. 
D)  Subsidiary's income/loss is carried forward to the consolidated balance sheet. 
E)  All foreign currency gains/losses are eliminated in the consolidated income statement and balance sheet. 
A)  Parent reports a cumulative translation adjustment from adjusting its investment account under the equity method. 
B)  Parent reports a gain or loss in net income from adjusting its investment account under the equity method. 
C)  Subsidiary's cumulative translation adjustment is carried forward to the consolidated balance sheet. 
D)  Subsidiary's income/loss is carried forward to the consolidated balance sheet. 
E)  All foreign currency gains/losses are eliminated in the consolidated income statement and balance sheet.

Question 18

Assume the functional currency is the U.S.Dollar; 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.

Question 19

A foreign subsidiary was acquired on January 1, 2018.Determine the exchange rate used to restate the following accounts at December 31, 2018.Land was purchased on October 1, 2018.Relevant exchange dates follow:
(A) January 1, 2018
(B) October 1, 2018
(C) December 31, 2018
(D) Average, 2018
(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.

Accepted Answer

(1.) C; (2) C; (3.)

Question 20

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

Accepted Answer

A)  $364,000. 
B)  $372,000. 
C)  $380,000. 
D)  $360,000. 
E)  $404,000. 
A)  $364,000. 
B)  $372,000. 
C)  $380,000. 
D)  $360,000. 
E)  $404,000.

Exam 10: A: Translation of Foreign Currency Financial Statements

What was the amount of the translation adjustment for 2018?

Under the temporal method, how would cost of goods sold be remeasured?

Contrast the purpose of remeasurement with the purpose of translation.

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

Assume the functional currency is the Euro; compute the U.S.Statement of Retained Earnings amount reported for Dividends in 2018.

Under the temporal method, which accounts are remeasured using current exchange rates?

Assume the functional currency is the U.S.Dollar; compute the U.S.income statement amount for sales for 2018.

Which one of the following statements would justify this conclusion?

A foreign subsidiary of a U.S.corporation purchased equipment on January 4, 2015. (A.) How would depreciation expense on the equipment be translated for 2018? (B.) How would depreciation expense on the equipment be remeasured for 2018?

What must Dilty do to ready the subsidiary's financial statements for consolidation?

Assume Boerkian was a foreign subsidiary of a U.S.multinational company and the U.S.dollar was the functional currency of the subsidiary.Prepare a schedule of changes in the net monetary assets of Boerkian for the year 2018 and properly label the resulting gain or loss.

Under the current rate method, how would cost of goods sold be translated?

Required: Assume that Boerkian was a foreign subsidiary of a U.S.multinational company and the local currency of the subsidiary (stickle) is the functional currency.On the December 31, 2018 balance sheet, what was the translated value of the Land account?

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

Assume the functional currency is the Euro; compute the U.S.balance sheet amount for equipment for 2018.

When consolidating a foreign subsidiary, which of the following statements is true?

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

Assume the functional currency is the Euro; compute the U.S.income statement amount for sales 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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