Question
Balance Sheet as at December 31 (in U.S. Dollars) 2020 2019 Current Monetary Assets $8,000,000 $7,500,000 Inventory $2,000,000 $3,000,000 Plant and Equipment (Net) $1,500,000 $1,800,000
Balance Sheet as at
December 31 (in U.S. Dollars)
2020 | 2019 | |
Current Monetary Assets | $8,000,000 | $7,500,000 |
Inventory | $2,000,000 | $3,000,000 |
Plant and Equipment (Net) | $1,500,000 | $1,800,000 |
Total Assets | $11,500,000 | $12,300,000 |
Current Liabilities | $1,100,000 | $2,300,000 |
Bonds Payable (due Dec 31, 2026) | $5,000,000 | $5,000,000 |
Common Shares | $4,000,000 | $4,000,000 |
Retained Earnings | $1,400,000 | $1,000,000 |
Total Liabilities and Equity | $11,500,000 | $12,300,000 |
Income Statement for
the Year ended
December 31, 2020
Sales | $5,200,000 |
Inventory, January 1, 2020 | $3,000,000 |
Purchases | $3,000,000 |
Inventory, December 31, 2020 | ($2,000,000) |
Depreciation Expense | $300,000 |
Other Expenses | $400,000 |
$4,700,000 | |
Net Income | $500,000 |
Other Information:
Exchange Rates:
December 31, 2019: | US $1 = CDN $1.1850 |
September 30, 2020: | US $1 = CDN $1.1975 |
December 31, 2020: | US $1 = CDN $1.20 |
Average for 2020: | US $1 = CDN $1.19 |
Wilsen paid US$100,000 in dividends on September 30, 2020. The inventories on hand at the end of 2020 were purchased when the exchange rate was US$1 = CDN$1.195.
Sales, purchases and other expenses occurred evenly throughout the year.
Compute Wilsen's exchange gain or loss for 2020 if Wilson's functional currency is the same as Hilman Enterprises' functional currency (i.e., the Canadian dollar).
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