Part #6 - Translation of Foreign Currency Financial Statements (30 Points) BGRI Incorporated is a U.S. based clothing manufacturing who acquired 100 percent interest in Dingo's Dots Corporation an Australian manufacturer and supplier of fine linens back on December 31, 2012. During that time the exchange rate for the Australian Dollar (AUD) was $0.90. Dingo's Dots financial statements as of December 31, 2014, two years latter are given below. The January 1, 2014 beginning Supplies on hand of $300,000(AUD) was acquired on November 20, 2013 when the exchange rate was $0.93. Purchase of Supplies were acquired uniformly during 2014. The December 31, 2014 Supplies on hand of $550,000(AUD) was acquired in the latter part of 2014 when the exchange rate was $0.76. The January 1, 2014 beginning Inventory of $500,000(AUD) was acquired on December 1, 2013 when the exchange rate was $0.94. Purchase of inventory were acquired uniformly during 2014. The December 31, 2014, ending inventory of $900,000(AUD) was acquired in the latter part of 2014 when the exchange rate was $0.76. Straight-Line Depreciation Depreciable Life First Year of All fixed Assets were on the books when the subsidiary was acquired except for the following: Exchange Rate on Date of Acquisition Price Acquisition Date Transaction Equipment $200,000(AUD) June 30, 2013 $0.92 Building $950,000(AUD) January 5, 2013 $0.89 Depreciation Half Year 10 25 Full Year Dividends were declared and paid on November 15, 2014 when the exchange rate was $0.77. Other exchange rates for $1 AUD follow: $0.95 January 1, 2014 January 1-December 31, 2014 Average December 31, 2014 $0.85 $0.75 The U.S. Dollar is the functional Currency. Part #6 - Subsection(a){Translation of Foreign Currency Financial Statements} Calculate December 31, 2014 re-measurement balance for supplies expense and cost of goods sold using the information given. Part #6 - Subsection($){Translation of Foreign Currency Financial Statements} Calculate December 31, 2014 re-measurement balances for fixed assets, depreciation and accumulated depreciation for the fixed assets identified using the information given. Part #6 - Subsection(){Translation of Foreign Currency Financial Statements} Calculate December 31, 2014 re-measurement gain/loss using the information given. The Net Monetary Liabilities at 1/1/14 is $2,775,000. Translate Dingo's Dots Corp Australian Dollar Financial Statements in the templates below at December 31, 2014 using the information provided. Dingo's Dots Corporation Income Statement For the Year Ending December 31, 2014 Australian Dollar Translation Rate U.S. $ Sales Cost of Goods Sold Gross Margin $5,726,500 $1,756,900 $3,969,600 Operating Expenses: Depreciation Expense - Equipment Depreciation Expense - Building Utilities Expense Administration Expense Supplies Expense Total Operating Expenses $75,000 -$210,000 $50,000 $650,000 -$425,000 $1,410,000 Re-measurement Gain Loss To Balance Net Income $2,559,600 Dingo's Dots Corporation Statement of Retained Earnings For the Year Ending December 31, 2014 Australian Dollar Translation Rate U.S. $ $1,392,430.00 Retained Earnings, 1/1/2014 Net Income Subtotal Dividends Retained Earnings, 12/31/2014 $1,675,000 $2,559,600 $4,234,600 $1,105,000 $3,129,600 Dingo's Dots Corporation Balance Sheet For the Year Ending December 31, 2014 Australian Dollar Translation Rate U.S. $ Assets Current Assets: Cash Accounts Receivable $2,865,000 $765,900 $550,000 $900,000 $5,080,900 II HR HITRI IIIIIIIIIIIIIIIIHIER HERRRRRRRRRRRRRRRR Supplies Inventory Total Current Assets 111111 III III. 11 11 11 11 12 18 HUL HIHIHIIHHHHHHHHHHHHHHHHHHHHHH!!! $1,000,000 Noncurrent Assets Equipment Less: Accumulated Depreciation Buildings Less: Accumulated Deprecation -$250,000 $4,200,000 -$630,000 1111111111111111111111111111111111111111111111111111111 Land $1,675,000 $5,995,000 Total Noncurrent Assets Total Assets $11,075,900 Liabilities Short-Term Liabilities Accounts Payable -$816,300 -$816,300 Total Short-Term Liabilities Long-Term Liabilities Long-Term Debt Total Long-Term Liabilities $4,500,000 -$4,500,000 Total Liabilities $5,316,300 Stockholders Equity Common Stock 1111111111111111111111111111111111111111111111111111111 Additional Paid In Capital Retained Earnings Total Stockholders Equity -$705,000 -$1.925,000 -$3,129,600 -$5,759,600 Total Liabilities & Stockholders Equity $11,075,900 Part #6 - Translation of Foreign Currency Financial Statements (30 Points) BGRI Incorporated is a U.S. based clothing manufacturing who acquired 100 percent interest in Dingo's Dots Corporation an Australian manufacturer and supplier of fine linens back on December 31, 2012. During that time the exchange rate for the Australian Dollar (AUD) was $0.90. Dingo's Dots financial statements as of December 31, 2014, two years latter are given below. The January 1, 2014 beginning Supplies on hand of $300,000(AUD) was acquired on November 20, 2013 when the exchange rate was $0.93. Purchase of Supplies were acquired uniformly during 2014. The December 31, 2014 Supplies on hand of $550,000(AUD) was acquired in the latter part of 2014 when the exchange rate was $0.76. The January 1, 2014 beginning Inventory of $500,000(AUD) was acquired on December 1, 2013 when the exchange rate was $0.94. Purchase of inventory were acquired uniformly during 2014. The December 31, 2014, ending inventory of $900,000(AUD) was acquired in the latter part of 2014 when the exchange rate was $0.76. Straight-Line Depreciation Depreciable Life First Year of All fixed Assets were on the books when the subsidiary was acquired except for the following: Exchange Rate on Date of Acquisition Price Acquisition Date Transaction Equipment $200,000(AUD) June 30, 2013 $0.92 Building $950,000(AUD) January 5, 2013 $0.89 Depreciation Half Year 10 25 Full Year Dividends were declared and paid on November 15, 2014 when the exchange rate was $0.77. Other exchange rates for $1 AUD follow: $0.95 January 1, 2014 January 1-December 31, 2014 Average December 31, 2014 $0.85 $0.75 The U.S. Dollar is the functional Currency. Part #6 - Subsection(a){Translation of Foreign Currency Financial Statements} Calculate December 31, 2014 re-measurement balance for supplies expense and cost of goods sold using the information given. Part #6 - Subsection($){Translation of Foreign Currency Financial Statements} Calculate December 31, 2014 re-measurement balances for fixed assets, depreciation and accumulated depreciation for the fixed assets identified using the information given. Part #6 - Subsection(){Translation of Foreign Currency Financial Statements} Calculate December 31, 2014 re-measurement gain/loss using the information given. The Net Monetary Liabilities at 1/1/14 is $2,775,000. Translate Dingo's Dots Corp Australian Dollar Financial Statements in the templates below at December 31, 2014 using the information provided. Dingo's Dots Corporation Income Statement For the Year Ending December 31, 2014 Australian Dollar Translation Rate U.S. $ Sales Cost of Goods Sold Gross Margin $5,726,500 $1,756,900 $3,969,600 Operating Expenses: Depreciation Expense - Equipment Depreciation Expense - Building Utilities Expense Administration Expense Supplies Expense Total Operating Expenses $75,000 -$210,000 $50,000 $650,000 -$425,000 $1,410,000 Re-measurement Gain Loss To Balance Net Income $2,559,600 Dingo's Dots Corporation Statement of Retained Earnings For the Year Ending December 31, 2014 Australian Dollar Translation Rate U.S. $ $1,392,430.00 Retained Earnings, 1/1/2014 Net Income Subtotal Dividends Retained Earnings, 12/31/2014 $1,675,000 $2,559,600 $4,234,600 $1,105,000 $3,129,600 Dingo's Dots Corporation Balance Sheet For the Year Ending December 31, 2014 Australian Dollar Translation Rate U.S. $ Assets Current Assets: Cash Accounts Receivable $2,865,000 $765,900 $550,000 $900,000 $5,080,900 II HR HITRI IIIIIIIIIIIIIIIIHIER HERRRRRRRRRRRRRRRR Supplies Inventory Total Current Assets 111111 III III. 11 11 11 11 12 18 HUL HIHIHIIHHHHHHHHHHHHHHHHHHHHHH!!! $1,000,000 Noncurrent Assets Equipment Less: Accumulated Depreciation Buildings Less: Accumulated Deprecation -$250,000 $4,200,000 -$630,000 1111111111111111111111111111111111111111111111111111111 Land $1,675,000 $5,995,000 Total Noncurrent Assets Total Assets $11,075,900 Liabilities Short-Term Liabilities Accounts Payable -$816,300 -$816,300 Total Short-Term Liabilities Long-Term Liabilities Long-Term Debt Total Long-Term Liabilities $4,500,000 -$4,500,000 Total Liabilities $5,316,300 Stockholders Equity Common Stock 1111111111111111111111111111111111111111111111111111111 Additional Paid In Capital Retained Earnings Total Stockholders Equity -$705,000 -$1.925,000 -$3,129,600 -$5,759,600 Total Liabilities & Stockholders Equity $11,075,900