Question 7

Cumulative translation adjustment

IF you know the following items in EURO

Item	Amount EURO
Cash	1000
Accounts receivable	500
Inventory	500
Property and equipment	500
Patents, net	1000
Long-term debt	1000
short-term debt	1000
Capital stock	1000
Additional paid in Capital	500
Sales	2000
Cost of goods sold	1500
Selling and administrative expenses	100
Depreciation expense	100
Amortization expense	100
Interest expense	100

January 1, Year 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . $1.10

Rate when property and equipment were acquired and short and long-term

debt was incurred, January 15, Year 1 . . . . . . . . . . . . . . . . . . . . . . .. . . . . ...1.11

Rate when patent was acquired, February 1, Year 1 . . . . . . . . . . . . . . . . . . .1.12

Average Year 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 1.15

Average 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 1.15

Average for the month of December . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . 1.10

December 31, Year 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .1.13

1- Calculate : Total assets in USD according to Current rate method

2- Calculate : Total Liabilities in USD according to Current rate method

3- Calculate : Total Net income in USD according to Current rate method

4- Calculate : Amortization expense in USD according to Current rate method

5- Calculate : Depreciation expense in USD according to Current rate method

6- Calculate : Amortization expense in USD according to Temporal Method

7- Calculate : Depreciation expense in USD according to Temporal Method