Translation and Remeasurement of Depreciable Assets

Massmart, the second largest retailer in Africa, is a subsidiary of Wal-Mart Inc., a U.S. company. Massmart reports its accounts in its local currency, the rand (R). Wal-Marts fiscal year ends January 31. On February 1, 2021, Massmart reports facilities with original cost of R500 million and accumulated depreciation of R280 million in its noncurrent assets, as follows:

Buildings acquired at a cost of R175 million when the exchange rate was $0.15/R, with accumulated depreciation of R100 million. The buildings are being depreciated on a straight-line basis over 25 years.

Equipment acquired at a cost of R325 million when the exchange rate was $0.08/R, with accumulated depreciation of R180 million. The equipment is being depreciated on a straight-line basis over 10 years.

Additional exchange rates:

February 1, 2021	$0.09
Average for fiscal 2022	0.07
January 31, 2022	0.06

Massmart still holds these facilities at January 31, 2022.

Required

a. Assume that Massmarts functional currency is the rand. Calculate Massmarts translated facilities, at cost, and related accumulated depreciation, at January 31, 2022, and its translated depreciation expense for fiscal 2022.

b. Now assume that Massmarts functional currency is the U.S. dollar. Calculate Massmarts remeasured facilities, at cost, and related accumulated depreciation, at January 31, 2022, and its remeasured depreciation expense for fiscal 2022.

Enter answers using all zeros (do not abbreviate to millions or thousands).

		a. Translated	b. Remeasured
Facilities, at cost		30,000,000	52,250,000
Accumulated depreciation		18,000,000 incorrect	33,050,000
Depreciation expense		1,400,000 incorrect	2,090,000 incorrect