Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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

Step: 3

blur-text-image

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

College Accounting

Authors: James A Heintz, Robert W Parry

20th Edition

538745215, 978-1111624743

More Books

Students also viewed these Accounting questions

Question

2. What types of information are we collecting?

Answered: 1 week ago

Question

5. How quickly can we manage to collect the information?

Answered: 1 week ago

Question

3. Tactical/strategic information.

Answered: 1 week ago