1,000 Translation and Remeasurement Gain and Loss Costco Canada Holdings is a Canadian subsidiary of Costco Wholesale Corporation, a U.S. company. Assume that the following data relate to Costco Canada's activities for 2020 (in millions). Net monetary assets (liabilities), January 1, 2020 C$ 700 Acquisition of plant assets for debt, February 15, 2020 Purchase of inventory made evenly during 2020 3,500 Collection of receivables outstanding at January 1, 2020 2,700 Sales made evenly during 2020 6,000 Cost of goods sold 3,300 Depreciation of assets acquired when the exchange rate was $0.85/C$ 400 Current operating expenses (excluding depreciation and amortization), incurred evenly during 2020 1,200 Refinancing or "rollover" of commercial paper 800 Exchange rates ($/C$) during 2020 are: January 1, 2020 $0.80 Average for 2020 $0.75 February 15, 2020 0.78 December 31, 2020 0.72 (a) Assuming Costco Canada's functional currency is the U.S. dollar, prepare a schedule to compute the remeasurement gain or loss for 2020. Instructions: 1. Use negative signs with answers to indicate a negative exposed position balance. 2. Use negative signs with answers to indicate an amount that reduces the exposed position balance. 3. Using the drop-down menu, select the appropriate answer to indicate a remeasurement gain or remeasurement loss. 4. Do not use a negative sign with your remeasurement gain or remeasurement loss answer. CS (in millions) Exposed position, 1/1/20 Acquisition of plant assets for debt Purchase of inventory Sales Operating expenses Amount (C$) 700 (1,000) (3,500) 6,000 (1,200) $/C$ Amount ($) 0.72 x $ 0 x 0.72 x 0 x 0.72 x 0 x 0.72 x 0.72 x 0 X 0 x CS 1,000 0 x Exposed position, 12/31/20 Remeasurement loss 0 x 0 x $ (b) Assuming Costco Canada's functional currency is the Canadian dollar, prepare a schedule to compute the translation gain or loss for 2020. Assume net assets on January 1, 2020, amounted to C$1,200 million. Instructions: 1. Use negative signs with answers to indicate a negative exposed position balance. 2. Use negative signs with answers to indicate an amount that reduces the exposed position balance. 3. Using the drop-down menu, select the appropriate answer to indicate a translation gain or translation loss. 4. Do not use a negative sign with your translation gain or translation loss answer. (in millions) Exposed position, 1/1/20 Net income in 2020 CS Amount (C$) 1,200 1,100 $/C$ Amount ($) 1.9 * $ 2,280 x 1.97 x 2,167 x 4,447 x 2.01 X (4,623) X $ (176) X CS 2,300 Exposed position, 12/31/20 Translation loss 1,000 Translation and Remeasurement Gain and Loss Costco Canada Holdings is a Canadian subsidiary of Costco Wholesale Corporation, a U.S. company. Assume that the following data relate to Costco Canada's activities for 2020 (in millions). Net monetary assets (liabilities), January 1, 2020 C$ 700 Acquisition of plant assets for debt, February 15, 2020 Purchase of inventory made evenly during 2020 3,500 Collection of receivables outstanding at January 1, 2020 2,700 Sales made evenly during 2020 6,000 Cost of goods sold 3,300 Depreciation of assets acquired when the exchange rate was $0.85/C$ 400 Current operating expenses (excluding depreciation and amortization), incurred evenly during 2020 1,200 Refinancing or "rollover" of commercial paper 800 Exchange rates ($/C$) during 2020 are: January 1, 2020 $0.80 Average for 2020 $0.75 February 15, 2020 0.78 December 31, 2020 0.72 (a) Assuming Costco Canada's functional currency is the U.S. dollar, prepare a schedule to compute the remeasurement gain or loss for 2020. Instructions: 1. Use negative signs with answers to indicate a negative exposed position balance. 2. Use negative signs with answers to indicate an amount that reduces the exposed position balance. 3. Using the drop-down menu, select the appropriate answer to indicate a remeasurement gain or remeasurement loss. 4. Do not use a negative sign with your remeasurement gain or remeasurement loss answer. CS (in millions) Exposed position, 1/1/20 Acquisition of plant assets for debt Purchase of inventory Sales Operating expenses Amount (C$) 700 (1,000) (3,500) 6,000 (1,200) $/C$ Amount ($) 0.72 x $ 0 x 0.72 x 0 x 0.72 x 0 x 0.72 x 0.72 x 0 X 0 x CS 1,000 0 x Exposed position, 12/31/20 Remeasurement loss 0 x 0 x $ (b) Assuming Costco Canada's functional currency is the Canadian dollar, prepare a schedule to compute the translation gain or loss for 2020. Assume net assets on January 1, 2020, amounted to C$1,200 million. Instructions: 1. Use negative signs with answers to indicate a negative exposed position balance. 2. Use negative signs with answers to indicate an amount that reduces the exposed position balance. 3. Using the drop-down menu, select the appropriate answer to indicate a translation gain or translation loss. 4. Do not use a negative sign with your translation gain or translation loss answer. (in millions) Exposed position, 1/1/20 Net income in 2020 CS Amount (C$) 1,200 1,100 $/C$ Amount ($) 1.9 * $ 2,280 x 1.97 x 2,167 x 4,447 x 2.01 X (4,623) X $ (176) X CS 2,300 Exposed position, 12/31/20 Translation loss
