Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Company ( a U . S . - based company ) has a subsidiary in Nigeria where the local currency unit is the naira (

Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31,2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]):
Cash NGN 15,230 Notes payable NGN 20,140
Inventory 10,700 Common stock 20,140
Land 4,070 Retained earnings 10,070
Building 40,700
Accumulated depreciation (20,350)
NGN 50,350 NGN 50,350
The subsidiary acquired the inventory on August 1,2019, and the land and building in 2013. It issued the common stock in 2011. During 2020, the following transactions took place:
2020
Feb. 1 Paid 8,070,000 NGN on the note payable.
May 1 Sold entire inventory for 16,700,000 NGN on account.
June 1 Sold land for 6,070,000 NGN cash.
Aug. 1 Collected all accounts receivable.
Sept. 1 Signed long-term note to receive 8,070,000 NGN cash.
Oct. 1 Bought inventory for 20,070,000 NGN cash.
Nov. 1 Bought land for 3,070,000 NGN on account.
Dec. 1 Declared and paid 3,070,000 NGN cash dividend to parent.
Dec. 31 Recorded depreciation for the entire year of 2,035,000 NGN.
The U.S dollar ($) exchange rates for 1 NGN are as follows:
2011 NGN 1= $ 0.0055
20131=0.0049
August 1,20191=0.0069
December 31,20191=0.0071
February 1,20201=0.0073
May 1,20201=0.0075
June 1,20201=0.0077
August 1,20201=0.0081
September 1,20201=0.0083
October 1,20201=0.0085
November 1,20201=0.0087
December 1,20201=0.0089
December 31,20201=0.0098
Average for 20201=0.0088
Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020?
Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2020?
(Input all amounts as positive. Enter amounts in whole dollars.) Include all details for calculations.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting An Introduction To Concepts Methods And Uses

Authors: Clyde P. Stickney, Roman L. Weil

12th Edition

0324381980, 978-0324381986

More Books

Students also viewed these Accounting questions

Question

=+c) What would you like to see to check the conditions?

Answered: 1 week ago