Remeasurement of Financial StatementsTemporal Metho

Remeasurement of the Income Statement Exhibit 10.8 shows the remeasurement of SWISSCOs income statement and statement of retained earnings. Revenues and expenses incurred evenly throughout the year (sales, other expenses, and income taxes) are remeasured at the average exchange rate of $0.65. Expenses related to assets remeasured at historical exchange rates (depreciation expense and amortization expense) are remeasured at relevant historical rates.

Income Statement

For Year Ending December 31, 2020

CHF Remeasurement Rate U.S.$

Sales CHF 4,000,000 1.05 A $4,200,000

Cost of goods sold ( 3,000,000) Calculation (3,130,500)

Gross profit 1,000,000 1,069,500

Depreciation expense (100,000) 1.01 H (101,000)

Amortization expense (10,000) 1.02 H (10,200)

Other expenses (220,000) 1.05 A (231,000)

Income before income

Taxes 670,000 727,300

Income taxes (200,000) 1.05 A (210,000)

Income before

remeasurement loss 470,000 517,300

Remeasurement Loss To balance (47,000)

Net Income CHF 470,000 470,300

Statement of Retained Earnings

For Year Ending December 31, 2020

CHF Remeasurement Rate U.S.$

Retained earnings, 1/1/20

CHF 0 $ 0

Net income, 2020 470,000 To balance 470,300

Dividends (150,000) 1.07 H (160,500)

Retained earnings,12/31/20 CHF 320,000 $ 309,80

Statement of Retained Earnings For Year Ending December 31, 2020 CHF Remeasurement Rate U.S.$ Retained earnings, 1/1/20 CHF 0 $ 0 Net income, 2020 470,000 To balance 470,300 Dividends (150,000) 1.07 H (160,500) Retained earnings, 12/31/20 Above CHF 470,000 $ 470,300 CHF 320,000 $ 309,80

Beginning inventory, 1/1/20 CHF 150,000 1.00=$ 150,000

Plus: Purchases, 2020 3,250,000 1.05= 3,412,500

Less: Ending inventory, 12/31/20 (400,000) 1.08= (432,000)

Cost of goods sold, 2020 CHF 3,000,000 $3,130,50 How did they calculate for the Plus: Purchases and the REMEASUREMENT LOSS ON INCOME STATEMENT