Question
Translation and Remeasurement of Subsidiary Trial Balance Costsave Corporation, a U.S. company, acquired Denner, a discount supermarket chain in Switzerland, on January 1, 2020. Denner
Translation and Remeasurement of Subsidiary Trial Balance
Costsave Corporation, a U.S. company, acquired Denner, a discount supermarket chain in Switzerland, on January 1, 2020. Denner is a subsidiary of Costsave, and its results are consolidated with those of Costsave in Costsaves financial statements. Denners trial balances for January 1 and December 31, 2020, in Swiss francs (CHF) appear below.
Dr(Cr) | ||
---|---|---|
(in thousands) | December 31 | January 1 |
Cash and receivables | CHF 30,000 | CHF 25,000 |
Inventories | 55,000 | 60,000 |
Plants and equipment, net | 175,000 | 150,000 |
Accounts and notes payable | (120,000) | (125,000) |
Common stock | (30,000) | (30,000) |
Retained earnings, January 1 | (80,000) | (80,000) |
Dividends | 20,000 | -- |
Sales | (500,000) | -- |
Cost of sales | 375,000 | -- |
Operating expenses | 75,000 | -- |
Totals | CHF 0 | CHF 0 |
Additional Information: (in thousands)
- Included in operating expenses is depreciation expense of CHF5,000.
- Plant and equipment of CHF30,000 was purchased for cash during 2020, when the exchange rate was $1.04. Depreciation of CHF2,000 was taken on this purchase during 2020.
- The ending inventory was purchased during the month of December.
- Revenues, purchases, and operating expenses other than depreciation occurred evenly during the year.
- Dividends were declared on December 31, 2020.
- Exchange rates for 2020 were as follows ($/CHF):
January 1, 2020 | $1.03 |
Average for 2020 | 1.06 |
Average for December, 2020 | 1.08 |
December 31, 2020 | 1.09 |
It is now December 31, 2020, and Denners accounts must be converted to U.S. dollars in preparation for consolidation.
(a) Denners functional currency is the U.S. dollar. Prepare Denners remeasured December 31, 2020 trial balance, and a schedule showing the computation of the remeasurement gain or loss for 2020.
- Use negative signs with your Cr (credit balance) answers.
- Enter answers in thousands.
Remeasured Trial Balance, December 31 2020 | |||
---|---|---|---|
CHF Dr(Cr) | $/CHF | $ Dr(Cr) | |
Cash, receivables | CHF 30,000 | Answer | Answer |
Inventories | 55,000 | Answer | Answer |
Plant and equipment, net | 175,000 | (1) below | Answer |
Accounts and notes payable | (120,000) | Answer | Answer |
Common stock | (30,000) | Answer | Answer |
Retained earnings, beginning | (80,000) | Answer | Answer |
Dividends | 20,000 | Answer | Answer |
Sales | (500,000) | Answer | Answer |
Cost of sales | 375,000 | (2) below | Answer |
Operating expenses | 75,000 | (3) below | Answer |
Remeasurement (gain) or loss | -- | (4) below | Answer |
CHF 0 | Answer |
Do not use negative signs with any of your answers below.
(1) Plant and equipment, net (in thousands) | |||
---|---|---|---|
CHF | $/CHF | $ | |
Plant and equipment, net: purchased prior to 2020 | Answer | Answer | Answer |
Plant and equipment, net: purchased during 2020 | Answer | Answer | Answer |
Answer | Answer |
Do not use negative signs with any of your answers below.
(2) Cost of Sales (in thousands) | |||
---|---|---|---|
Beginning inventory | Answer | Answer | Answer |
Purchases | Answer | Answer | Answer |
Ending inventory | Answer | Answer | Answer |
Cost of sales | Answer | Answer |
Do not use negative signs with any of your answers below.
(3)Operating expenses (in thousands) | |||
---|---|---|---|
CHF | $/CHF | $ | |
Depreciation (for P&E purchased prior to 2020) | Answer | Answer | Answer |
Depreciation (for P&E purchased in 2020) | Answer | Answer | Answer |
Other operating expenses | Answer | Answer | Answer |
Total | Answer | Answer |
Instructions for Remeasurement Gain/Loss Schedule:
- 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.
(4) Remeasurement Gain/Loss Schedule (in thousands) | |||
---|---|---|---|
CHF | $/CHF | $ | |
Exposed position, beginning | Answer | Answer | Answer |
Sales | Answer | Answer | Answer |
Purchases | Answer | Answer | Answer |
Cash operating expenses | Answer | Answer | Answer |
Dividends | Answer | Answer | Answer |
Plant and equipment acquisition | Answer | Answer | Answer |
Answer | |||
Exposed position, ending | Answer | Answer | Answer |
AnswerRemeasurement gainRemeasurement loss | Answer |
(b) Denners functional currency is the Swiss franc. Prepare Denners translated December 31, 2020 trial balance, and a schedule showing the computation of the translation gain or loss for 2020.
- Use negative signs with your Cr (credit balance) answers.
- Enter answers in thousands.
Translated Trial Balance December 31 2020 | |||
---|---|---|---|
CHF Dr(Cr) | $/CHF | $ Dr(Cr) | |
Cash, receivables | CHF 30,000 | Answer | Answer |
Inventories | 55,000 | Answer | Answer |
Plant and equipment, net | 175,000 | Answer | Answer |
Accounts and notes payable | (120,000) | Answer | Answer |
Common stock | (30,000) | Answer | Answer |
Retained earnings, beginning | (80,000) | Answer | Answer |
Dividends | 20,000 | Answer | Answer |
Sales | (500,000) | Answer | Answer |
Cost of sales | 375,000 | Answer | Answer |
Operating expenses | 75,000 | Answer | Answer |
Translation loss (gain) | see below | Answer | |
CHF 0 | Answer |
Instructions for Translation Gain/Loss Schedule:
- 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.
Translation Gain/Loss Schedule (in thousands) | |||
---|---|---|---|
CHF | $/CHF | $ | |
Exposed position, beginning | Answer | Answer | Answer |
Net income | Answer | Answer | Answer |
Dividends | Answer | Answer | Answer |
Answer | |||
Exposed position, ending | Answer | Answer | Answer |
AnswerTranslation gainTranslation loss | Answer |
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