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15. Translation temporal Please refer to Table 4 in the datafile. If EuroTrade applies the temporal method of translation, then it will make a translation

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15. Translation temporal Please refer to Table 4 in the datafile. If EuroTrade applies the temporal method of translation, then it will make a translation if the EUR/USD exchange rate - (Note: gain=equity increases, loss=equity decreases) a) impossible to determine b) loss; increases gain; decreases d) loss; decreases Euro Trade Americas is a US subsidiary of a Dutch company. The subsidiary uses USD as functional currency and its balance sheet has to be translated into EUR every quarter. Assets Cash Accounts receivable Inventory Net plant & equipment 2 000 000 1 500 000 3 100 000 2 400 000 9 000 000! Tots Llabilities Accounts payable Short-term bank debt Long-term debt Common stock Total 900 000 1 800 000 2 300 000 4 000 000 9 000 000

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