Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Problem 11-3 (algorithmic) Question Help Ganado Europe (C). Using facts in the chapter for Ganado Europe, assume the exchange rate on January 2, 2016, in

image text in transcribedimage text in transcribed

Problem 11-3 (algorithmic) Question Help Ganado Europe (C). Using facts in the chapter for Ganado Europe, assume the exchange rate on January 2, 2016, in Exhibit 11.5 appreciated from $1.1500/ to $1.5200/. Calculate Ganado Europe's translated balance sheet for January 2, 2016, with the new exchange rate using the current rate method as shown in the popup window, a. What is the amount of translation gain or loss? b. Where should it appear in the financial statements? a. What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss. $ (Round to the nearest dollar.) 6 Data Table EXHIBIT 11.5 Ganado Europe's Translation Loss After Depreciation of the Euro: Current Rate Method December 31, 2015 January 2, 2016 Exchange Rate Translated Exchange Rate Translated Assets In Euros (E) (US$/euro) Accounts (US$) (US$/euro) Accounts (US$) Cash 1,700,000 1.1500 $1,955,000 1.5200 $2,584,000 Accounts receivable 3,200,000 1.1500 3,680,000 1.5200 4,864,000 Inventory 3,000,000 1.1500 3,450,000 1.5200 4,560,000 Net plant and equipment 5,100,000 1.1500 5,865,000 1.5200 7,752,000 Total 13,000,000 $14,950,000 $19,760,000 Liabilities and Net Worth Accounts payable 1,500,000 1.1500 $1,725,000 1.5200 $2,200,000 Short-term bank debt 1,800,000 1.1500 2.070,000 1.5200 2,736,000 Long-term debt 1,100,000 1.1500 1,265,000 1.5200 1,672,000 Common stock 1,800,000 1.2030 2,165,400 1.2030 2,165,400 Retained earnings 6,800,000 1.1500 (a) 7,820,000 1.1500 (6) 7,820,000 Translation adjustment (CTA) (95,400) 3,086,600 Total 13,000,000 $14.950.000 $19,760,000 (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 euro. Click on the icon located on the top-right corner of the data table in order to copy its contents into a spreadsheet

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 The Art And Science Of Assurance Engagements

Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Ingrid B. Splettstoesser-Hogeterp

11th Edition

0132088061, 978-0132088060

More Books

Students also viewed these Accounting questions

Question

What leadership style would best characterize Adam Neumann?

Answered: 1 week ago