Costsave Corporation, a U'S. company, acquired Denner, a discount supermarket chain in Switzerland, on J anuary 1,

Question:

Costsave Corporation, a U'S. company, acquired Denner, a discount supermarket chain in Switzerland, on J anuary 1, 2017. Denner is a subsidiary of Costsave, and its results are consolidated with those of Costsave in Costsave’s financial statements.

Denner’s trial balances for January 1 and December 31, 2017, in Swiss francs (CHF) appear below.

image text in transcribed

Additional information:
1. Included in operating expenses is depreciation expense of CHF5,000.
2. Plant and equipment of CHF30,000 was purchased for cash during 2017, when the exchange rate was \($1.04.\) Depreciation of CHF2,000 was taken on this purchase during 2017.
3. The ending inventory was purchased during the month of December.
4. Revenues, purchases, and operating expenses other than depreciation occurred evenly during the year.
5. Dividends were declared 6n December 31, 2017.
6. Exchange rates for 2017 were as follows (\($/CHF):


It is now December 31, 2017, and Denner’s accounts must be converted to U.S. dollars in preparation for consolidation.

Required

a. Denner’s functional currency is the U.S. dollar. Prepare Denner’s remeasured December 31, 2017 trial balance, and a schedule showing the computation of the remeasurement gain or loss for 2017.

b. Denner’s functional currency is the Swiss franc. Prepare Denner’s translated December 31, 2017 trial balance, and a schedule showing the computation of the translation gain or loss for 2017.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Advanced Accounting

ISBN: 978-1618531513

3rd Edition

Authors: Susan S. Hamlen

Question Posted: