Question
Superbuy, located in Germany, is a subsidiary of Plentistores, a U.S. retail company. Superbuy reports the following financial results for 2020: Sales100,000,000 Cost of sales75,000,000
Superbuy, located in Germany, is a subsidiary of Plentistores, a U.S. retail company. Superbuy reports the following financial results for 2020:
Sales100,000,000
Cost of sales75,000,000
Operating expenses20,000,000
Dividends1,000,000
Additional information for 2020:
Beginning retained earnings, remeasured$15,000,000
Beginning retained earnings, translated$20,000,000
Beginning net monetary liabilities(50,000,000)
Beginning net assets85,000,000
Beginning inventory balance2,000,000
Ending inventory balance3,500,000
Operating expenses include 8,000,000 in depreciation and amortization on assets acquired when the exchange rate was $1.40/.
Dividends were declared when the exchange rate was $1.18/.
Sales and inventory purchases were made evenly throughout the year.
The beginning inventory was purchased when the exchange rate was $1.25/, and the ending inventory was purchased when the exchange rate was $1.17/.
Exchange rates ($/):
Beginning of 2020 $1.25
Average for 2020 1.20
End of 2020 1.17
Required
a. Assume the functional currency of Superbuy is the euro. Calculate the subsidiary's translated ending retained earnings, in U.S. dollars.
Do not use negative signs with any of your answers below.
Beginning translated retained earnings Answer
Net income Answer
Dividends Answer
Ending translated retained earnings Answer
b. Assume the functional currency of Superbuy is the U.S. dollar. Calculate the subsidiary's remeasured ending retained earnings, in U.S. dollars.
Instructions for the Remeasured gain or loss:
1. Use negative signs with answers to indicate a negative exposed position.
2. Use negative signs with answers that reduce the exposed position balance.
3. Using the drop-down menu at the bottom of the table and select the appropriate answer.
However,do not use a negative sign with numerical answer for measured gain or loss.
Remeasured gain or loss: $/ $
Beginning exposure Answer Answer Answer
Sales Answer Answer Answer
Purchases Answer Answer Answer
Out-of-pocket expense Answer Answer Answer
Dividends Answer Answer Answer
Answer
Ending exposure Answer Answer Answer
Answer
Remeasurement gain
Remeasurement loss Answer
However, do not use a negative sign with numerical answer for measured gain or loss.
Remeasured cost of sales: $/ $
Beginning inventory Answer Answer Answer
Purchases Answer Answer Answer
Ending inventory Answer Answer Answer
Remeasured cost of sales Answer
Do not use negative signswith any of your answers below.
Remeasured operating expenses: $/ $
Out-of-pocket expenses (computed above) Answer
Depreciation/amortization Answer Answer Answer
Remeasured operating expenses Answer
Do not use negative signswith any of your answers below.
Remeasured net income: $
Sales Answer
Cost of sales Answer
Operating expenses Answer
Remeasurement gain or loss Answer
Remeasured net income Answer
Do not use negative signswith any of your answers below.
Ending remeasured retained earnings $
Beginning remeasured retained earnings Answer
Net income Answer
Dividends Answer
Ending remeasured retained earnings Answer
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