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Stilton Company ( a U . S . - based company ) has a subsidiary in Canada that began operations at the start of 2
Stilton Company a USbased company has a subsidiary in Canada that began operations at the start of with assets of Canadian dollars CAD and liabilities of CAD During this initial year of operation, the subsidiary reported a profit of CAD It distributed two dividends, each for CAD with one dividend declared on March and the other on October Applicable US dollar $ exchange rates for Canadian dollar follow:
January start of business $
March
Weighted average rate for
October
December
Required:
Assume that the Canadian dollar is this subsidiarys functional currency. What translation adjustment would the company report for the year
Assume that on October Stilton entered into a forward exchange contract to hedge the net investment in this subsidiary. On that date, the company agreed to sell CAD in three months at a forward exchange rate of $CAD Prepare the journal entries required by this forward contract.
Compute the net translation adjustment the company will report in accumulated other comprehensive income for the year under this second set of circumstancesAssume that on October Stilton entered into a forward exchange contract to hedge the net investment in this subsidiary. On that date, the company agreed to sell CAD in three months at a forward exchange rate of $ Prepare the journal entries required by this forward contract.
Note: If no entry is required for a transactionevent select No journal entry required" in the first account field.
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tableNoDate,General Journal,Debit,CreditNo journal entry required,
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