Question
Asda is a British supermarket chain owned by Wal-Mart Stores, Inc. Assume that the following data relate to Asda's activities for 2017 (in millions). Net
Asda is a British supermarket chain owned by Wal-Mart Stores, Inc. Assume that the following data relate to Asda's activities for 2017 (in millions).
Net assets (liabilities) reported at fair value, January 1, 2017 | 1,400 |
Acquisition of plant assets for debt, February 15, 2017 | 2,000 |
Purchase of inventory made evenly during 2017 | 7,000 |
Collection of receivables outstanding at January 1, 2017 | 5,400 |
Sales made evenly during 2017 | 12,000 |
Cost of goods sold | 6,600 |
Depreciation of assets acquired when the exchange rate was $1.80/ | 800 |
Current operating expenses (excluding depreciation and amortization), incurred evenly during 2017 | 2,400 |
Refinancing or "rollover" of commercial paper | 1,600 |
Exchange rates ($/) during 2017 are:
January 1, 2017 | $1.90 | Average for 2017 | $1.97 |
February 15, 2017 | 1.95 | December 31, 2017 | 2.01 |
(a) Assuming Asda's functional currency is the U.S. dollar, prepare a schedule to compute the remeasurement gain or loss for 2017
Instructions:
- Use negative signs with answers to indicate a negative exposed position balance.
- Use negative signs with answers to indicate an amount that reduces the exposed position balance.
- Using the drop-down menu, select the appropriate answer to indicate a remeasurement gain or remeasurement loss.
- Do not use a negative sign with your remeasurement gain or remeasurement loss answer.
(in millions) | Amount () | $/ | Amount ($) |
---|---|---|---|
Exposed position, 1/1/17 | Answer
| Answer
| $Answer
|
Acquisition of plant assets for debt | Answer
| Answer
| Answer
|
Purchase of inventory | Answer
| Answer
| Answer
|
Sales | Answer
| Answer
| Answer
|
Operating expenses | Answer
| Answer
| Answer
|
Answer
| |||
Exposed position, 12/31/17 | Answer
| Answer
| Answer
|
AnswerRemeasurement gainRemeasurement loss
| $Answer
|
(b) Assuming Asda's functional currency is the pound, prepare a schedule to compute the translation gain or loss for 2017. Assume net assets on January 1, 2017, amounted to 2,400 million.
Instructions:
- Use negative signs with answers to indicate a negative exposed position balance.
- Use negative signs with answers to indicate an amount that reduces the exposed position balance.
- Using the drop-down menu, select the appropriate answer to indicate a translation gain or translation loss.
- Do not use a negative sign with your translation gain or translation loss answer.
(in millions) | Amount () | $/ | Amount ($) |
---|---|---|---|
Exposed position, 1/1/17 | Answer
| Answer
| $Answer
|
Net income | Answer
| Answer
| Answer
|
Answer
| |||
Exposed position, 12/31/17 | Answer
| Answer
| Answer
|
AnswerTranslation gainTranslation loss
| $Answer |
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