Question 1

Compute ending inventory for 2018 under the current rate method.

Accepted Answer

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

Question 2

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

Accepted Answer

Remeasurement is needed for transactions...

Question 3

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.

Question 4

Farley Brothers, a U.S.company, had a subsidiary in Italy.Under what conditions would the U.S.dollar be considered the functional currency for this subsidiary?

Accepted Answer

To determine the subsidiary's functional...

Question 5

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.

Question 6

On January 1, 2018, Veldon Co., a U.S.corporation with the U.S.dollar as its functional currency, established Malont Co.as a subsidiary.Malont is located in the country of Sorania, and its functional currency is the stickle (§).Malont engaged in the following transactions during 2018:
  Required:
Calculate the translation adjustment for Malont.(Round your answers to the nearest whole dollar.)

Accepted Answer

The answer of On January 1, 2018, Veldon Co., a...

Question 7

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 8

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.

Question 9

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.

Question 10

What amount would have been reported for cost of goods sold on Porter's consolidated income statement at December 31, 2018?

Accepted Answer

A)   $24,000.
B)   $26,400.
C)   $22,800.
D)   $27,600.
E)   $28,800.

Question 11

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 12

Where is the translation adjustment reported in the parent company's financial statements?

Accepted Answer

A)   Net loss in the income statement.
B)   Cumulative translation adjustment as a deferred asset.
C)   Cumulative translation adjustment as a deferred liability.
D)   Accumulated other comprehensive income.
E)   Retained earnings.

Question 13

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.

Question 14

A net liability balance sheet exposure exists and the foreign currency depreciates.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.

Question 15

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.

Question 16

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.

Question 17

Under the current rate method, common stock would be translated at what rate?

Accepted Answer

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

Question 18

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.

Question 19

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.

Question 20

Where is the remeasurement gain or loss reported in the parent company's financial statements?

Accepted Answer

A)   Net income/loss in the income statement.
B)   Cumulative translation adjustment as a deferred asset.
C)   Cumulative translation adjustment as a deferred liability.
D)   Other comprehensive income.
E)   Retained earnings.

Exam 10: Translation of Foreign Currency Financial Statements

Compute ending inventory for 2018 under the current rate method.

Correct Answer
verified

Where is the translation adjustment reported in the parent company's financial statements?

Correct Answer
verified

Farley Brothers, a U.S.company, had a subsidiary in Italy.Under what conditions would the U.S.dollar be considered the functional currency for this subsidiary?

Correct Answer
verified
To determine the subsidiary's functional...
View Answer

Amortization of the patent, translated, for 2018 would be

Correct Answer
verified

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

Correct Answer
verified

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?

Correct Answer
verified
Assets and liabilities are translated us...
View Answer

What amount would have been reported for cost of goods sold on Porter's consolidated income statement at December 31, 2018?

Correct Answer
verified

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?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

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?

Correct Answer
verified

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

Correct Answer
verified
Remeasurement is needed for transactions...
View Answer

Under the current rate method, common stock would be translated at what rate?

Correct Answer
verified

Correct Answer
verified

Compute ending inventory for 2018 under the temporal method.

Correct Answer
verified

Where is the remeasurement gain or loss reported in the parent company's financial statements?

Correct Answer
verified

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

Correct Answer
verified

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?

Correct Answer
verified

Exam 10: Translation of Foreign Currency Financial Statements

Compute ending inventory for 2018 under the current rate method.

Correct AnswerverifiedShow Answer

Where is the translation adjustment reported in the parent company's financial statements?

Correct AnswerverifiedShow Answer

Farley Brothers, a U.S.company, had a subsidiary in Italy.Under what conditions would the U.S.dollar be considered the functional currency for this subsidiary?

Correct AnswerverifiedTo determine the subsidiary's functional...View AnswerShow Answer

Amortization of the patent, translated, for 2018 would be

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedAssets and liabilities are translated us...View AnswerShow Answer

What amount would have been reported for cost of goods sold on Porter's consolidated income statement at December 31, 2018?

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedRemeasurement is needed for transactions...View AnswerShow Answer

Under the current rate method, common stock would be translated at what rate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Compute ending inventory for 2018 under the temporal method.

Correct AnswerverifiedShow Answer

Where is the remeasurement gain or loss reported in the parent company's financial statements?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

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To determine the subsidiary's functional...
View Answer

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Assets and liabilities are translated us...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Remeasurement is needed for transactions...
View Answer

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Correct Answer
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