Current Rate Method Below

Temporal Method Below

Bangkok Instruments manufactures the instruments primarily for the oil and gas industry globallythough with recent commodity price increase of all kinds including copper, its business has begun to grow rapidly. Sales are primarily to multinational companies based in the United States a Europe Bangkok Instruments balance sheet in thousands of Thai bahts (B) as of March 31 is shown in the popup window Exchange rates for translating Bangkok Instruments' balance sheet into U.S. dollars are: B42.67/5 April 1 exchange rate, after 25% devaluation B32.00/5 March 31 exchange rate, before 25% devaluation. All inventory was acquired at this rate. B230016 Historic exchange rate at which plant and equipment were acquired. The Thai baht dropped in value from B32.00/5 to B42.67/S between March 31 and April 1. Assuming no change in balance sheet accounts betwe these two days, calculate the gain or loss from translation by both the current rate method and the temporal method. Bangkok Instruments' translated balance sheet using the current rate method is shown here, and the one using the temporal method is shown here ! Explain the translation gain or loss in terms of changes in the value of exposed accounts. what is the amount of translation gain or loss? Enter a positive number fo Using the translated balance sheet under the current rate method, gain and negative for a loss (Round to the nearest dollar) Bangkok Instruments' Translation Gain (Loss) After Depreciation of the Baht: Current Rate Method March 31 April1 Exchange Translated Exchange Translated Assets In Bahts (B) Rate (B/$) Accounts ($) Rate (B/S) Accounts ($) Cash B23,000,000 32.00 $718,750 42.67 $539,020 Accounts receivable 36,000,000 32.00 1,125,000 42.67 843,684 Inventory 50,000,000 32.00 1,562,500 42.67 1,171,783 Net plant and equipment 58,000,000 32.00 1,812,500 42.67 1,359,269 Total B167,000,000 $5,218,750 $3,913,756 Liabilities and Net Worth Accounts payable B17,000,000 32.00 $531,250 42.67 $398,406 Bank loans 61,000,000 32.00 1,906,250 42.67 1.429,576 Common stock 19,000,000 23.00 826,087 23.00 826,087 Retained earnings 70,000,000 35.80 (a) 1,955,163 35.80 (b) 1,955,163 ? 2 Translation adjustment (CTA) Total B167,000,000 $5,218,750 $3,913756 (a) Dollar retained earnings before depreciation are the cumulative sum of additions to retained earnings of all prior years, translated to exchange rates in each year. (b) Translated into dollars at the same rate as before depreciation of the baht. Data Table Bangkok Instruments' Translation Gain (Loss) After Depreciation of the Baht: Temporal Method March 31 April Exchange Translated Exchange Translated Assets In Bahts (B) Rate (B/S) Accounts ($) Rate (B/S) Accounts ($) Cash B23,000,000 32.00 $718.750 42.67 $539,020 Accounts receivable 36,000,000 32.00 1.125,000 42.67 843,684 Inventory 50,000,000 32.00 1.562,500 32.00 1,562,500 Net plant and equipment 58,000,000 23.00 2,521,739 23.00 2,521,739 Total B167,000,000 $5,427,989 $5,466,943 Liabilities and Net Worth Accounts payable B17,000,000 32.00 $531,250 42.67 $398,406 Bank loans 61,000,000 32.00 1,906,250 42.67 1,429,576 Common stock 19,000,000 23.00 826,087 23.00 826,087 Retained earnings 70,000,000 26.27 (a) 2,664 402 26.27(b) 2,664 402 Translation gain (loss) (c) ? Total B167,000,000 $5,927,989 $5,466,943 (a) Dollar retained earnings before depreciation are the cumulative sum of additions to retained earnings of all prior years, translated to exchange rates in each year. (6) Translated into dollars at the same rate as before depreciation of the baht. (C) Under the temporal method, the translation gain (loss) would be closed into retained earnings through the