Accounting diversity problems

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Please, provide detailed calculations Document Preview: (1) EXCEL CASE—TRANSLATING FOREIGN CURRENCY FINANCIAL STATEMENTS Charles Edward Company established a subsidiary in a foreign country on January 1, 2013, by investing FC 3,200,000 when the exchange rate was $0.50/FC. Charles Edward negotiated a bank loan of FC 3,000,000 on January 5, 2013, and purchased plant and equipment in the amount of FC 6,000,000 on January 8, 2013. It depreciated plant and equipment on a straight-line basis over a 10-year useful life. It purchased its beginning inventory of FC 1,000,000 on January 10, 2013, and acquired additional inventory of FC 4,000,000 at three points in time during the year at an average exchange rate of $0.43/FC. It uses the first-in, first-out (FIFO) method to determine cost of goods sold. Additional exchange rates per FC 1 during the year 2013 follow: January 1–31, 2013. . . . . . . . . . . . . . $0.50 Average 2013 . . . . . . . . . . . . . . . . . . . 0.45 December 31, 2013. . . . . . . . . . . . . . 0.38 The foreign subsidiary’s income statement for 2013 and balance sheet at December 31, 2013, follow: INCOME STATEMENT For the Year Ended December 31, 2013 FC (in thousands) Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . FC 5,000 Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000 Gross profit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 Selling expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400 Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600 Income before tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 Income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 700 Retained earnings, 1/1/13 . . . . . . . . . . . . . . . . . . . . . . . . . . . –0– Retained earnings,... Attachments: 4.docx

 

Solution ID:565839 | This paper was updated on 26-Nov-2015

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