een SEE PUTA Seeman wary 3, 2017, Pipi 1 OFA rigato Compan 9 (omPany acquired a 100 percentinteestin the common 2 '¥ @ Japanese firm, when Arigato’s stockholders’ equity was: Common stock Retained earnings 200,000 yen 400,000 yen on December 31, 2017, Arigato's trial balance was: Debit Credit | Cash and cash equivalents Accounts receivable ad Inventory 100,000 Plant and equipment 700,000 Accumulated depreciation ¥240,000 Accounts payable 80,000 Common stock 200,000 Retained earnings 400,000 | Sales ‘ 600,000 j Cost of sales 360,000 } Operating expenses 140,000 | Depreciation 60,000 oe Total 1,520,000 Exchange rates were: January 3, 2017 December 31, 2017 2017 average Revenues and expenses were jncurred evenly during 2017. Required: ee aschedule translating the December 31,2017, trial balance from Japanese b Fae rof the accumulated exchange differences on translating foreign operation (translation adj stent). Scanned with CamScannerqr Chapter 4 ie 438 a —— fi 1 EXE san Company 28a Subsidy jg nized Durian Come pany's Decembe, On January 1, 2617, Davao Company orga re uri Thailand with an nial investment costof oon 31, 2017, trial balance in Thailand baht is as follows: Cash and cash equivalents Accounts receivable (net) Receivable from Davao Company Inventory Plant and equipment 10,000 Accumulated depreciation 12,000 Accounts payable 50,000 Bonds payable 60,000 ae stock 150,000 ales Cost of goods sold ae Depreciation expense 10,00 Operating expenses 30,000 Dividends paid 15,000 Total 282,000 282,000 Additional Information: 1. . The receivable from Davao Co. is denominated in Thailand baht. Davao's books show a P4,000 payable to Durian Co. 2, Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased on November 1. 3. _ Equipmentis depreciated by the straight line method with a 10 year life and no residual value. A full year's depreciation is taken in the ‘year of acquisition. The equipment was acquired on March 1, 4. The dividends were declared and paid on November 1, 5. Exchange rates were as follows: January t:2017 =" =” Ibaee plas March | Vbaht= 148 November | Vbaht= 1.54 December 31 Tbaht= 1,69 2017 average Tbaht= 1.59 Scanned with CamScannerOo “atements oben 20-2, Continued ee 439 If : ——___ | gaguired: fel yreparea schedule i translati = paht to pesos, Stating the December 3] 2017, tr ‘land a Prepare a proof of the trang 31,2017, trial balance from Thailané where isthe OCT on trans}, tM Adjustment 8 fore; : ‘i a lating f OS fe Weis : on Davao's consolidated financigh sor OP™ions (translation adjustment) reported al statements and its foreign subsidiary? 203 rte January 2, 2017, Migue} fecommon Stock of Mosler ea Acquired for P900,000 a 100 percent interest in (B5)-On that date, Moslems stocks 27 i8 Brunei where the currency isthe dollar Common stock ders’ equity accounts were as follows: Retained earings 33 10,000 . OnDecember 31, 2017, Moslem's trial balance was: cate if Debit Credit ‘ash and cash equivalent: $ ‘Accounts receivable es Inventory cn Plant and equipment 35,000 | Accumulated depreciation . BS.9,000 | Accounts payable 2,600 | Common stock 20,000 Retained earnings 10,000 Salés 30,000 Cost of sales 17,000 Operating expense 7,000 Depreciation expense 3,000 Dividends 1500 ‘Tonal BS71,600 BS71,600 The inventory on January 2, 2017 of 'B$5,000 was acquired when the exchange rate Was B$1 = P29. The ending inventory was acquired on December 31,2017. Revenues and expenses ‘were incurred evenly during 2017. Mostem declared and paid dividend of BS1,500 on October 15, 2017. Spot rates were: January 3, 2017 By ea October 15, 2017 Blan December 31,2017 ae Scanned with CamScannerChapters, YU 4 ee prt Problem 20-3, Continued w ired: jal balance from Brung; ree schedule translating the December 31,201 Twi ps! dollarto Philippine PESOS, y's books that affect the Investmentin 6. 6 b. Prepare all the entries on Miguel Moslem Stock account during 2017- EE 2017 of UK Co.,a British subsidiary ‘The foltowingis the trial balance as of December 31, 2¢ cepted accountin, of Philippine ¢ ‘Co. Ithas been adjusted to conform with generally accep g — > principle and is expressed in pounds. —— £2,500 Cash and cash equivalents 4,000 Accounts receivable 5,500 Inventories, at cost 750 Prepaid expenses 12,000 Property, plant, and equipment (gross) aaa 24,750 Accounts payable £3,500 Current portion of long-term debt 500 Long-term debt 7,500 Accumulated depreciation 3,000 Capital stock 5,000 Retained earnings, 1/1/2017 2,500 Sales 90,000 Cost of sales 80,000 Depreciation expense (1,500) Other expenses (5,750) 24,750 Additional Information: 1, The balance ofthe exchange differences on translating foreign’ operati lation Adjustment) account at December 31, 2016 was P50,000 (credit. ms 2. The peso balance of Retained Eamings at December 31, 2016 was P119,500. 3. When UK Co. was incorporated, the exchange rate was £1 = capital stock changes have occurred since then. Bet EN 4, Exchange rates were as follows: Scanned with CamScanner} pots PPO EON Stoney _ 441 potter 20-4 Continued ee 51,2017 jonny ber 31,2017 —TE=P6TA0 peer 1E=P6TAO rene 1£=P67.60 P6750 | receivables, payables, 5 Sales, purchases, and expenses nese debt are denominated in pounds. : Penses occurred evenly throughout the year. eae tanslate the financial statements of [Link]. into Philippine pesos. foc Corporation, a Philippine Co i i ; mpany, acquited 90 percent of the outstanding voting shares of Soot Corporation, Pala ‘company. On the acquisition date, theexchange rate of the Rupee in Philippine Pesos was P.87. The trial balance of the Goodluck Corporation on December 31,2017 expressed in Rupee, was as follows: Pakistan Rupee Cash and cash equivalents 15,000 Marketable securities 25,000 Accounts receivable 60,000 Inventories 80,000" Property, plant, and equipment (net) 420,000 F Accounts payable 50,000 Current portion of long-term debt 40,000 Long-term debt 120,000 Retained earnings 1/1/2017 90,000 Capital stock coco 250,000 Cost of goods sold ” D ry 40,000 epreciation expense 10,000 Other expenses 200,000 Sales ” 50,000 Other revenues a 800,000 - 800,000 Total a Scanned with CamScannerChapa 442 Problem 20-5, Continued ee jal position of Goodluck Corporation at Fanta, 1. Acondensed statement of Finance Fr ows Ss 1, 2017 in Pakistan Rupees, W! 500,000 Total assets 160,000 ee 90,000 Total liabilities ' . Retained earnings 250,000 Capital stock 500,000 Total liabilities and equity = : 7 in Philippi i 2017 were: 2.” Exchange rates of I Rupee in Philippine Pesos during year < January 1,2017 Bas December 31,2017 5 95 Average for year 2017 P90 3. The Philippine Peso balance of the Foreign Currency Translation / Adjustment” OCI account at January 1, 2017 was P1,500 (credit). 4. The Philippine Peso balance of the retained earnings account at January 1,2017 was P70,000. 5. The Pakistan Rupee is considered the functional curency of Goodluck Corporation. Required: Prepare a foreign-exchange translation worksheet for the Goodluck Corporation year 2017. \ a Scanned with CamScannerposton fFOMIY Fata Serene ompany owns a subj yon C Subsidia 7 . 1a it Australia whose statement of financial position in pws0n Sstralian Dollar (AS$) for the —— December 31, 2016 December 31, 2017 assels a 2 Cash and cash equivatenis ie ; Inventory o , propertyand equipment (net) 000.000 enon 1,000,000 __900,000 sets ; Sul 85088 As 2230,000 AS 2,250,000 Liabilities and Stockholders’ Equity Accounts payable AS 260,000 ‘AS 340,000 Long-term debt 1,250,000 1,100,000 Common stock aie e000 Retained earnings 220.000 310,000 Total liabilities and stockholders’ equit AS 1,230,000 A$ 2,250,000 Luzon formed the subsidiary on January 1, 2016 when the exchange rate was 30 Australian dollar for 1 Philippine peso. The exchange rate for 1 Philippine peso on December 31, 2016 had increased to 35 Australian dollar and to 40 Australian dollar on December 31, 2017. Income earned evenly over the year, and the subsidiary declared no dividends during its first two years of existence. Required: a Present both the direct and indirect exchange rate for the Australian dollar for the . three dates of (1) January 1, 2016 (2) December 31,2016 and (3) December 31, 2017. Did the peso strengthen or weaken in 2016 and in 2017. : b. Prepare the subsidiary's translated statement of financial position as of December 31, 2016 assuming Australian dollaris the subsidiary’s functional currency. G Pre are the subsidiary's translated statement, of, financial position as of December 31 OO 117 assuming Australian dollaris the subsidiary's functional currency. d Can utc the amount of ‘cumulative exchange differences on translating foreign cpeieion (translation adjustment) for 2017 resulting from the translation. Scanned with CamScanner