On July 1,206, Pizza Corporation established a 100% owned subsidiary Supreme Company in Mallorca, Spain, where the local currency is the Euro (). Following are the 20X9 and 20X8 summarized financial statements of Supreme: The exchance rates were as follows: On March 31, 20X9, Supreme purchased additional 140,000 of equipment. The company decided to depreciate the new equipment over 7 years on a straight-line basis with zero residual value. Supreme's ending inventory for 208 and 209 was purchased evenly over the final quarter of each year respectively. On October 1, 20X9, Supreme declared and paid dividends. Sales, inventory purchases and other expenses occurred evenly throughout the year. Required: a) Assuming that the functional currency is the Canadian Dollar (CAD), calculate the following translated amounts in Canadian Dollars (17 marks): i. Translation gain or loss (10 marks) ii. Cost of goods sold (3 marks) iii. Equipment (3 marks) iv. Common Shares (1 mark) b) Assuming that the functional currency is the Euro (), calculate the following translated amounts in Canadian Dollars ( 8 marks): i. Translation gain or loss (5 marks) ii. Depreciation expense (1 mark) iii. Bonds payable (1 mark) iv. Common Shares (1 mark) On July 1,206, Pizza Corporation established a 100% owned subsidiary Supreme Company in Mallorca, Spain, where the local currency is the Euro (). Following are the 20X9 and 20X8 summarized financial statements of Supreme: The exchance rates were as follows: On March 31, 20X9, Supreme purchased additional 140,000 of equipment. The company decided to depreciate the new equipment over 7 years on a straight-line basis with zero residual value. Supreme's ending inventory for 208 and 209 was purchased evenly over the final quarter of each year respectively. On October 1, 20X9, Supreme declared and paid dividends. Sales, inventory purchases and other expenses occurred evenly throughout the year. Required: a) Assuming that the functional currency is the Canadian Dollar (CAD), calculate the following translated amounts in Canadian Dollars (17 marks): i. Translation gain or loss (10 marks) ii. Cost of goods sold (3 marks) iii. Equipment (3 marks) iv. Common Shares (1 mark) b) Assuming that the functional currency is the Euro (), calculate the following translated amounts in Canadian Dollars ( 8 marks): i. Translation gain or loss (5 marks) ii. Depreciation expense (1 mark) iii. Bonds payable (1 mark) iv. Common Shares (1 mark)
