Assignment 03 Determine the Direct and Indirect exchange rates of any two currencies on the two dates and show the impact of changes in exchange rates on Imports and Exports (Note You can assume any two currencies and any two dates) (2 Marks) On Jan, 1 2014, Peter Corp (a U S based company) formed a new subsidiary in Saudi Arabia, Saeed Inc , with an initial investment of 30,000 SAR Assume Saeed Inc Purchases inventory evenly throughout 2014 The ending inventory is purchased Nov 30, 2014 Uses straight line depreciation on fixed assets Declares and pays dividends on Nov 30, 2014 Purchased the fixed assets on April 1, 2014 Uses SAR as the functional currency Exchange Rates are given Jan 1, 2014 0 260 April 1, 2014 0 255 Nov 30, 2014 0 240 Dec 31, 2014 0 238 REQUIRED Prepare a schedule to translate Saeeds financial statements on Dec 31, 2014 to U S dollars (2 Marks) Accounts SAR Cash 5000 Account Receivable 12000 Inventory 32000 Note Receivables 5000 Plant Equipment 70000 Cost of Goods sold 32000 Depreciation 2000 Other Expenses 18000 Dividends 16000 Total Debits 192000 ACC OC Translation Adjustment (Debit) Adjusted Total Credit Accumulated Depreciation 2000 Account Payable 12000 Bonds Payable 36000 Mortgage Payable 46000 Common Stock 30000 Sales 66000 Total Credits 192000 Anwar and Bravo wish to form the A B partnership Anwar contributes land with a book value of $ 175,000 (current value of $200,000) and a building with a book value of $200,000 (current value of $300,000) Bravo will contribute cash If the partners plan to share profits and losses equally after the formation of the partnership and assuming they have agreed to equal capital contributions, how much cash will Bravo have to contribute to form the partnership Pass Journal entry to be recorded in A B Firm (1 Mark)

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Assignment 03

Determine the Direct and Indirect exchange rates of any two currencies on the two dates and show the impact of changes in exchange rates on Imports and Exports. (Note: You can assume any two currencies and any two dates). (2 Marks)

On Jan, 1 2014, Peter Corp. (a U.S. based company) formed a new subsidiary in Saudi Arabia, Saeed Inc., with an initial investment of 30,000 SAR.

Assume Saeed Inc.

Purchases inventory evenly throughout 2014. The ending inventory is purchased Nov. 30, 2014.

Uses straight-line depreciation on fixed assets.

Declares and pays dividends on Nov. 30, 2014.

Purchased the fixed assets on April 1, 2014.

Uses SAR as the functional currency.

Exchange Rates are given:

Jan 1, 2014 0.260

April 1, 2014 0.255

Nov. 30, 2014 0.240

Dec. 31, 2014 0.238

REQUIRED

Prepare a schedule to translate Saeeds financial statements on Dec. 31, 2014 to U.S. dollars. (2 Marks)

Accounts	SAR
Cash	5000
Account Receivable	12000
Inventory	32000
Note Receivables	5000
Plant & Equipment	70000
Cost of Goods sold	32000
Depreciation	2000
Other Expenses	18000
Dividends	16000
Total Debits	*192000*
ACC. OC Translation Adjustment (Debit)
Adjusted Total Credit

Accumulated Depreciation	2000
Account Payable	12000
Bonds Payable	36000
Mortgage Payable	46000
Common Stock	30000
Sales	66000
Total Credits	192000

Anwar and Bravo wish to form the A&B partnership. Anwar contributes land with a book value of $ 175,000 (current value of $200,000) and a building with a book value of $200,000 (current value of $300,000). Bravo will contribute cash. If the partners plan to share profits and losses equally after the formation of the partnership and assuming they have agreed to equal capital contributions, how much cash will Bravo have to contribute to form the partnership? Pass Journal entry to be recorded in A&B Firm. (1 Mark)