Juarez
Balance Sheet
31-Dec-09
Euro
Assets
Cash 400,000
Inventory 600,000
Total Assets 1,000,000
Liabilites and Equity
Captial Stock 1,000,000
Total Liabilities and Equity 1,000,000
Exchange rate ($)
01-Jan-10 1.000
Average 2010 (A) 0.950
Rate when property and equipment
were acquired and long-term debt was
incurred, Jan 15, 2010 (H) 0.980
Rate when patent was acquired, Feb 1,
2010 (H) 0.970
Rate when dividends were declared,
Dec 1, 2010 (H) 0.920
Average for the month of December 0.910
12/31/2010 ( C) 0.900
31-Dec-10 Temporal Method Current Rate Method
in Euro Translation Rate in USD Translation Rate in USD
Assets
Cash 550,000 0.900 495,000 0.900 495,000
Account Receivable 600,000 0.900 540,000 0.900 540,000
Inventory* 800,000 0.910 728,000 0.900 720,000
Property and equipment 2,080,000 0.980 2,038,400 0.900 1,872,000
Accumulated Depreciation (200,000) 0.980 (196,000) 0.900 (180,000)
Total Assets 3,830,000 3,605,400 0.900 3,447,000
Liabilites and Equity -
Account Payable 330,000 0.900 297,000 0.900 297,000
Long-term Debt 2,000,000 0.900 1,800,000 0.900 1,800,000
Total Liabilities 2,330,000 2,097,000 2,097,000
Captial Stock 1,000,000 1.000 1,000,000 1.000 1,000,000
Retained Earnings 500,000 Calulation 508,400 485,200
Cumulative translation adjustment (135,200)
Total Equity 1,500,000 1,508,400 1,350,000
Total Liabilities and Equity 3,830,000 3,605,400 3,447,000
* Inventory is carried at FIFO cost, ending inventory was acquired evenly throughout the month of Decemeber
Income Statement Temporal Method Current Rate Method
2010 in Euro Translation Rate in USD Translation Rate in USD
Sales 8,000,000 0.950 7,600,000 0.950 7,600,000
Costs of goods sold 6,000,000 Caclulation 5,762,000 0.950 5,700,000
Selling and administrative expenses 500,000 0.950 475,000 0.950 475,000
Depreciation expense 200,000 0.980 196,000 0.950 190,000
Interest expense 180,000 0.950 171,000 0.950 171,000
Income before taxs 1,120,000 996,000 0.950 1,064,000
Income tax (r=25%) 280,000 0.950 266,000 0.950 266,000
Remeasurement Gain Calulation 91,200
Net income 840,000 821,200 0.950 798,000
Statement of Retained Earnings Temporal Method Current Rate Method
2010 in Euro Translation Rate in USD Translation Rate in USD
Retained earnings, 1/1/2010 -
Calulation
from Income
Net income 840,000 Statement 821,200 0.950 798,000
Less: Dividends 12/1/2010 (340,000) 0.92 (312,800) 0.920 (312,800)
Retained earnings, 31/12/2010 500,000 508,400 485,200
For Temporal Method
Calulation for COGs In Euro Translation Rate in USD
Beginning inventory 600,000 1.00 600,000
Plus: Purchases 6,200,000 0.95 5,890,000
Less: Ending Inventory (800,000) 0.91 (728,000)
Cost of goods solds 6,000,000 5,762,000
Net monetory liabilities position In Euro Translation Rate in USD
Monetory Assets (Cash + Account
receivable) 1,150,000
Monetary liability (Accounts ayable +
Longterm debts) 2,330,000
Net monetory liabilities position 1,180,000 0.90 1,062,000
Computaton of Measuremnet Gain In Euro Translation Rate in USD
Net monetary assets, 1/1/2010 400,000 1.00 400,000
Increase in monetary items -
Sales, 2010 8,000,000 0.95 7,600,000
Decrease in monetory items -
Purchases of inventory, 2010 (6,200,000) 0.95 (5,890,000)
Selling and administrative expenses (500,000) 0.95 (475,000)
Payment of interest, 2010 (180,000) 0.95 (171,000)
Income taxwa, 2010 (280,000) 0.95 (266,000)
Purchases of propenty and equipment, 2010 (2,080,000) 0.98 (2,038,400)
Dividends (340,000) 0.92 (312,800)
Net monetary liabilities, 31/12/2010 (1,180,000) (1,153,200)
Net monetary liabilities at current exchange rate(1,180,000) 0.90 (1,062,000)
Remeasurement gain 91,200