Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Plane Corporation, a U.S. company, owns 100% of Shipp Corporation, a Libyan company. Shipps equipment was acquired on the following dates (amounts are stated in

Plane Corporation, a U.S. company, owns 100% of Shipp Corporation, a Libyan company. Shipps equipment was acquired on the following dates (amounts are stated in Libyan dinars):

Jan. 01, 2014 Purchased equipment for 40,000 dinars

Jul. 01, 2014 Purchased equipment for 80,000 dinars

Jan. 01, 2015 Purchased equipment for 50,000 dinars

Jul. 01, 2015 Sold equipment purchased on Jan. 01, 2014 for 35,000 dinars

Exchange rates for the Libyan dinars on various dates are:

Jan. 01, 2014 1 dinar = $.500 Jan. 01, 2015 1 dinar = $.530

Jul. 01, 2014 1 dinar = $.520 Jul. 01, 2015 1 dinar = $.505

Dec. 31, 2014 1 dinar = $.530 Dec. 31, 2015 1 dinar = $.490

2014 avg. rate I dinar = $.515 2015 avg. rate 1 dinar = $.510

Shipp's equipment has an estimated 5 -year life with no salvage value and is depreciated using the straight-line method, calculating depreciation expense on a monthly basis. Shipps functional currency is the U.S. dollar, but the company uses the Libyan dinar as its reporting currency.

Required:

1. Determine the value of Shipps equipment account on December 31, 2015 in U.S. dollars.

2. Determine Shipp's depreciation expense for 2015 in U.S. dollars.

3. Determine the gain or loss from the sale of equipment on July 1, 2015 in U.S. dollars.

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

Step: 3

blur-text-image

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

Auditing Essentials

Authors: Frank C Giove

1st Edition

0738671509, 9780738671505

More Books

Students also viewed these Accounting questions