Question
Translation and Remeasurement Gain and Loss Asda is a British supermarket chain owned by Wal-Mart Stores, Inc. Assume that the following data relate to Asda's
Translation and Remeasurement Gain and Loss
Asda is a British supermarket chain owned by Wal-Mart Stores, Inc. Assume that the following data relate to Asda's activities for 2017 (in millions).
Net assets (liabilities) reported at fair value, January 1, 2017 | 560 |
Acquisition of plant assets for debt, February 15, 2017 | 800 |
Purchase of inventory made evenly during 2017 | 2,800 |
Collection of receivables outstanding at January 1, 2017 | 2,160 |
Sales made evenly during 2017 | 4,800 |
Cost of goods sold | 2,640 |
Depreciation of assets acquired when the exchange rate was $1.80/ | 320 |
Current operating expenses (excluding depreciation and amortization),incurred evenly during 2017 | 960 |
Refinancing or "rollover" of commercial paper | 640 |
Exchange rates ($/) during 2017 are:
January 1, 2017 | $1.52 | Average for 2017 | $1.58 |
February 15, 2017 | 1.56 | December 31, 2017 | 1.61 |
(a) Assuming Asda's functional currency is the U.S. dollar, prepare a schedule to compute the remeasurement gain or loss for 2017
Instructions:
Use negative signs with answers to indicate a negative exposed position balance.
Use negative signs with answers to indicate an amount that reduces the exposed position balance.
Using the drop-down menu, select the appropriate answer to indicate a remeasurement gain or remeasurement loss.
Do not use a negative sign with your remeasurement gain or remeasurement loss answer.
Enter answers using all decimal places, if applicable (do not round answers).
(in millions) | Amount () | $/ | Amount ($) |
---|---|---|---|
Exposed position, 1/1/17 | Answer | Answer | Answer |
Acquisition of plant assets for debt | Answer | Answer | Answer |
Purchase of inventory | Answer | Answer | Answer |
Sales | Answer | Answer | Answer |
Operating expenses | Answer | Answer | Answer |
Answer | |||
Exposed position, 12/31/17 | Answer | Answer | Answer |
AnswerRemeasurement gainRemeasurement loss | Answer |
(b) Assuming Asda's functional currency is the pound, prepare a schedule to compute the translation gain or loss for 2017. Assume net assets on January 1, 2017, amounted to 1,200 million.
Instructions:
Use negative signs with answers to indicate a negative exposed position balance.
Use negative signs with answers to indicate an amount that reduces the exposed position balance.
Using the drop-down menu, select the appropriate answer to indicate a translation gain or translation loss.
Do not use a negative sign with your translation gain or translation loss answer.
Enter answers using all decimal places, if applicable (do not round answers).
(in millions) | Amount () | $/ | Amount ($) |
---|---|---|---|
Exposed position, 1/1/17 | Answer | Answer | Answer |
Net income | Answer | Answer | Answer |
Answer | |||
Exposed position, 12/31/17 | Answer | Answer | Answer |
AnswerTranslation gainTranslation loss | Answer |
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