Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

ROS Inc. is located in Switzerland. ROS, whose currency is the Swiss franc (SF), is wholly owned by CRO Ltd., a Canadian company with a

ROS Inc. is located in Switzerland. ROS, whose currency is the Swiss franc (SF), is wholly owned by CRO Ltd., a Canadian company with a functional and presentation currency of the Canadian dollar. ROS's functional currency is the SF. The summarized balance sheet for ROS at December 31, 2019, was as follows:

Monetary assets SF 100,000

Non-monetary assets 200,000

total assets SF 300,000

Monetary liabilities SF 190,000

Non-monetary liabilities 30,000

Shareholders' equity 80,000

total liablities and equity SF 300,000

None of the non-monetary assets or liabilities are reported at market value.

What is the exchange gain or loss in Canadian dollars for ROS on January 1, 2020, if the exchange rate changes from SF 1 = C$1.50 to SF 1 = C$1.52 and this is the only event affecting ROS for that day?

a.Foreign exchange gain of $1,600 which will be reflected in net income

b.Foreign exchange gain of $1,600 which will be reflected in Other Comprehensive Income.

c.Foreign exchange loss of $1,600 which will be reflected in Other Comprehensive Income.

Tober Ltd. made the following purchases in Brazilian reals (BRL) during 2019 and paid the amounts owed based on the following schedule: The functional currency of Tober is the CAD$.

Date Purchases (BRL) Payments (BRL) BRL1 =X CAD$

April 1, 2019 875,000 .548

April 15, 2019 450,000 .552

April 23, 2019 925,000 .591

April 30, 2019 380,000 .578

The Account Payable on the Balance Sheet as at April 30, 2019 would be:

a.$531,560 CAD

b.970,000 CAD

c.$560,660 CAD

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_2

Step: 3

blur-text-image_3

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

Managerial Accounting The Cornerstone Of Business Decision Making

Authors: Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

8th Edition

0357715349, 978-0357715345

More Books

Students also viewed these Accounting questions

Question

In Problems 1732, solve each triangle. a = 15, b = 13, c = 3

Answered: 1 week ago

Question

2. Find five metaphors for communication.

Answered: 1 week ago