Tristan Narvaja, S.A., is the Uruguayan subsidiary of a U.S. manufacturing company. Its balance sheet for January 1 is shown in the popup window, LOADING.... The January 1 exchange rate between the U.S. dollar and the peso Uruguayo ($U) is $U21/$. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1, using the current rate method.

a. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1st, using the current rate method.

b. Calculate Tristan Narvaja's contribution to its parent's translation loss if the exchange rate on December 31st is $U21/$. Assume all peso Uruguayo accounts remain as they were at the beginning of the year.

Test:Exam 3

Question 8 of 10

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Tristan Narvaja, S.A. (A).Tristan Narvaja, S.A., is the Uruguayan subsidiary of a U.S. manufacturing company. Its balance sheet for January 1 is shown in the popup window,

LOADING...

. The January 1 exchange rate between the U.S. dollar and the peso Uruguayo ($U) is

$U21/$.

Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1, using the current rate method.

a. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1st, using the current rate method.

b. Calculate Tristan Narvaja's contribution to its parent's translation loss if the exchange rate on December 31st is

$U21/$.

Assume all peso Uruguayo accounts remain as they were at the beginning of the year.

a. Using the current rate method, what is Tristan Narvaja's contribution to the translation exposure of its parent on January 1st?

$Uenter your response here

(Round to the nearest peso Uruguayo.)b. What is Tristan Narvaja's contribution to its parent's translation loss if the exchange rate on December 31st is

$U21/$?

$enter your response here

(Round to the nearest dollar.)

Balance Sheet (thousands of pesos Uruguayo, $U)
Assets				Liabilities and Net Worth
Cash	$U70,000			Current liabilities	$U50,000
Accounts receivable	120,000			Long-term debt	80,000
Inventory	150,000			Capital stock	300,000
Net plant & equipment	230,000			Retained earnings	140,000
	$U570,000				$U570,000