Question
Problem: Ahmed Corporation, a British subsidiary of Nasser Corporation (a US company) was formed by on January 1, 2019 in exchange for all of the
Problem:
Ahmed Corporation, a British subsidiary of Nasser Corporation (a US company) was formed by on January 1, 2019 in exchange for all of the subsidiary's common stock. Ahmed has now ended its second year of operations on December 31, 2020. Relevant exchange rates are:
January 01, 2019 = 1 = $1.50 (historical rate)
December 31, 2020 = 1 = $1.65 (current rate)
2020 average rate = 1 = $1.63 (average rate)
Ahmed's adjusted trial balance is presented below for the calendar year 2020. The amount of equity adjustment carried over from 2019 is a credit balance of $41,250 (in dollars) and Retained Earning on 01-01-2020 $409,500
|
|
| In Pounds |
|
Debits: |
|
|
|
|
Cash |
| 75,000 |
| |
Accounts receivable |
|
| 362,000 |
|
Inventory |
|
| 41,000 |
|
Building |
|
| 400,000 |
|
Land |
|
| 100,000 |
|
Depreciation expense |
|
| 10,000 |
|
Other expenses |
|
| 133,000 |
|
Cost of goods sold |
|
| 380,000 |
|
Total debits |
|
| 1,501,000 |
|
|
|
|
|
|
Credits |
|
|
|
|
Accumulated depreciation |
| 17,500 |
| |
Accounts payable |
|
| 154,750 |
|
Common stock |
|
| 450,000 |
|
Retained earnings |
|
| 262,500 |
|
Sales revenue |
|
| 616,250 |
|
Total credits |
| 1,501,000 |
| |
|
|
|
|
|
|
|
|
|
|
Required: For Ahmed's second year of operations, under IFRS - IAS 21 prepare the following:
- Translation working papers;
- Translated income statement; and
- Translated balance sheet.
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