Remeasurement of financial statements Assume that your company owns a subsidiary operating in Australia. The subsidiary has adopted the Australian Dollar (AUD) as its functional currency. Your parent company operates this subsidiary like a division or a branch office, making all of its operating decisions, including pricing of its products. You conclude, therefore, that the functional currency of this subsidiary is the SUS and that its financial statements must be remeasured prior to consolidation. The subsidiary's financial statements in AUD) for the most recent year follow in part below The relevant exchange rates for the sus value of the Australian Dollar (AUD) are as follows: BOY rate 5083 FOY rate 30.70 Aug. rate Dividendate 5071 Beginning inventor 5072 Building $072 Equipment Historical rate common stock and APIO $1.02 1972 For parts a and b. below, use a negative sign with answers to indicate a reduction a. Remeasure the subsidiary's income statement statement of retained earnings and balance sheet into SUS for the current year assume that the BOY Retained Earnings is $1,126.8991 Round answers in "in US Dollars" column to the nearest dollar Remeasure in in AUD) Bate US Dollar Beginning inventory 5819.500 Purchases 2143 900 1983,450 Contod $1.000.000 171860 Actu deprecaulding 380.000 Property plant and equipment Depreciation expensebut O .000 $66,000 88,000 $154,000 OO Depreciation expense-building Depreciation expense-equipment Depreciation expense Income statement: Sales Cost of goods sold Gross profit Operating expenses Depreciation $3,300,000 (1,980,000) 1,320,000 (704,000) (154,000) $462,000 $1.732,500 462,000 (46,200) $2,148,300 Net income Statement of retained earnings: BOY retained earnings Net income Dividends Ending retained earnings Balance sheet: Assets Cash Accounts receivable Inventory Property, plant, and equipment (PPE), net Total assets Liabilities and stockholders' equity Current liabilities Long-term liabilities Common stock APIC Retained earnings Total liabilities and equity $939,180 765,600 983.400 1,818,960 $4,507,140 Oooooooo $559,680 1,304,160 220,000 275,000 2,148,300 $4,507,140 b. Compute the remeasurement gain or loss directly assuming BOY net monetary assets of AUD (564,960), a net monetary liability. Round all answers to the nearest dollar. Change in net monetary assets: Operating expenses Depreciation (704,000) (154,000) Oo Net income $462,000 Statement of retained earnings: BOY retained earnings $1,732,500 Net income 462,000 Dividends (46,200) Ending retained earnings $2,148,300 Balance sheet: Assets Cash $939,180 Accounts receivable 765,600 Inventory 983,400 Property, plant, and equipment (PPE), net 1,818,960 Total assets $4,507,140 Liabilities and stockholders' equity Current liabilities $559,680 Long-term liabilities 1,304,160 Common stock 220,000 APIC 275,000 Retained earnings 2,148,300 Total liabilities and equity $4,507,140 loo b. Compute the remeasurement gain or loss directly assuming BOY net monetary assets of AUD (564,960), a net monetary liability. Round all answers to the nearest dollar. Change in net monetary assets: Chg net monetary assets x (EOY - Avg exchange rate) Oooo Check Remeasurement of financial statements Assume that your company owns a subsidiary operating in Australia. The subsidiary has adopted the Australian Dollar (AUD) as its functional currency. Your parent company operates this subsidiary like a division or a branch office, making all of its operating decisions, including pricing of its products. You conclude therefore, that the functional currency of this subsidiary is the US and that its financial statements must be remeasured prior to consolidation. The subsidiary's financial statements in AUDI for the most recent year follow in part a. below The relevant exchange rates for the SUS value of the Australian Dollar (AUD) e as follows: BOY rate 50.70 Avgrate 50.76 Dividende 30.71 Historical rates SORT 10.72 muling 3072 5072 Equipment Historical care common stock and Ano 11.02 For parts and b. below. use a negative sin with answers to indicate a reduction Remeasure the subsidiary's income statement statement of retained earn and balance sheet into Sus for the current yesume that the BOV Retarda Round a nswers in US Dollar column to the nearest dollar Land or parts a, and b. below, use a negative sign with answers to indicate a reduction Remeasure the subsidiary's income statement statement of retained earnings, and balance sheet into SUS for the current year (assume that the BOY Retained Earnings is $1,126,8991 Round all answers in 'In US Dollars column to the nearest dollar Remeasure in in AUD) Rate US Dollars Beginning inventory $819,500 Purchases 2,143,000 Ending inventory (983,4001 Cost of goods sold $1.000.000 5713960 Bulding 1,320,000 Acum deprec-building 1650.000 Equipment 0.000 Accum.deprec-equipment 14.000000 Property, plant, and equipment PPE S R O Deprecation expense building 366000 Deprecatione perve equipment Deprecatione per $15.000 income statement 1100.000 Cost of goods sold Gross profit 112000 Operating expenses (704000 OOOOOO $42.000 Statement of retained earnings 52.148.300 Remeasurement of financial statements Assume that your company owns a subsidiary operating in Australia. The subsidiary has adopted the Australian Dollar (AUD) as its functional currency. Your parent company operates this subsidiary like a division or a branch office, making all of its operating decisions, including pricing of its products. You conclude, therefore, that the functional currency of this subsidiary is the US and that its financial statements must be remeasured prior to consolidation. The subsidiary's financial statements in AUD) for the most recent year follow in part a. below: The relevant exchange rates for the SUS value of the Australian Dollar (AUD) are as follows: BOY rate 50.83 EOY rate $0.70 Avg. rate 50.76 Dividend rate 30.71 Historical rates: Beginning inventory 50.83 Land 50.72 Building 50.72 Equipment 50.72 Historical rate (common stock and APIC) $1.02 For parts a. and b. below, use a negative sign with answers to indicate a reduction a. Remeasure the subsidiary's income statement, statement of retained earnings, and balance sheet into SUS for the current year (assume that the BOY Retained Earnings is $1,126,899). Round all answers in "In US Dollars" column to the nearest dollar in Remeasure Rate US Dollars 0 $ (in AUD) Beginning inventory $819,500 Purchases 2,143,900 Ending inventory (983,400) Cost of goods sold $1,980,000 Land $718,960 Building 1,320,000 Accum.deprec.-building (660,000) Equipment 880,000 Accum.deprec.-equipment (440,000) Property, plant, and equipment (PPE), net $1,818,960 Depreciation expense-building $66,000 Depreciation expense-equipment 88,000 Depreciation expense $154,000 Income statement: Sales $3,300,000 Cost of goods sold (1,980,000) Gross profit 1,320,000 Operating expenses (704,000) Depreciation (154,000) O 0 $ Oolo $462,000 ool $1,732,500 462,000 (46,200) $2,148,300 Net income Statement of retained earnings: BOY retained earnings Net income Dividends Ending retained earnings Balance sheet: Assets Cash Accounts receivable Inventory Property, plant, and equipment (PPE), net Total assets $939,180 765,600 983,400 1,818,960 $4,507,140 E Business Course * Return to course !! My Gross profit Operating expenses Depreciation 1,320,000 (704,000) (154,000) Oooooo $462,000 $1,732,500 462,000 (46,200) $2,148,300 Net income Statement of retained earnings: BOY retained earnings Net income Dividends Ending retained earnings Balance sheet: Assets Cash Accounts receivable Inventory Property, plant, and equipment (PPE), net Total assets Liabilities and stockholders equity Current liabilities Long-term liabilities Common stock APIC Retained earnings Total liabilities and equity $939,180 765,600 983,400 1.818.960 $4,507,140 $559,680 1,304,160 220,000 275,000 2,148,300 $4,507,140 INT b. Compute the remeasurement gain or loss directly assuming BOY net monetary assets of AUD (564,960), a net monetary liability Round all answers to the nearest dollar. Change in net monetary assets: Chg net monetary assets x (EOY - Avg exchange rate) Check