Below are several word type" problems that are written in the manner / style one will expect to see on both our exams and the CPA exam when it comes to certain aspects of the material we're covering. These types of questions require you to understand what is being asked for, identify the relevant information in the question, and determine the correct answer. In a multiple-choice question, which is what you will see on our exams and a portion of the CPA exam, you will have a number of choices to choose from, including of course the correct answer. For our purposes, you're being asked to figure out the correct answer and enter accordingly per instructions below. Note: These are not intended to be an exam review. For each of the below, follow the instructions and when answers are correct, the gray-shaded cells will turn green. 1) Company A, a domestic entity, sold goods to a British company on 3/5 with the transaction denominated in Pounds. The sales price of the goods was 100,000, and the cost of the goods was $60,000. The receivable is payable in full on 4/5, and Company A prepares their financials monthly. Relevant exchanges rates are 3/5 1 = $1.20, 3/31 1 = $1.23, and 4/5 1 = $1.18. How much would Company A book to their Accounts Receivable on 3/5? On 3/31, would their A/R increase or decrease? (select) On 3/31, how much would they need to revalue A/R by? On 4/5, how much would they collect in U.S. dollars? On 4/5, would they have a currency gain or loss? (select) On 4/4, how much would that gain or loss be? 2) Company A is foreign subsidiary of a domestic company and Company A's functional currency is the Euro. On company A's financials / trial balance at the end of year 20X1, they reported total assets of 500,000, total liabilities of 300,000, and total net income of 50,000. The spot rate on 12/31/XO was 1 = $1.05, the spot rate on 12/31/X1 was 1 = $1.04, and the average rate for 20x1 was 1 = $1.07. The equity accounts on their trial balance translated to a net credit balance of $175,000. Based on this information: What would the translated balance in U.S. dollars be for total assets? (use negative number if a credit) What would the translated balance in U.S. dollars be for total liabilities? (use negative number if a credit) What would the translated balance in U.S. dollars be for total net income (use negative number if a credit) What would the accumulated translation adjustment be? (use negative number if a credit)
