Juarez, Balance Sheet (12/31/2009)

Euro
Assets
Cash 400,000

Inventory 600,000
Total Assets 1,000,000
Liabilites and Equity
Captial Stock 1,000,000
Total Liabilities and Equity 1,000,000
31-Dec-10 Temporal Method Current Rate Method
in Euro Translation Ratein USD Translation Ratein USD
Assets
Cash 550,000 0.900 495,000 0.900 495,000
Account Receivable 600,000 0.900 540,000 0.900 540,000
Inventory* 800,000 0.910 728,000 0.900 720,000
Property and equipment 2,080,000 0.980 2,038,400 0.900 1,872,000
Accumulated Depreciation (200,000) 0.980 (196,000) 0.900 (180,000)
Total Assets 3,830,000 3,605,400 3,447,000
Liabilites and Equity
Account Payable 330,000 0.900 297,000 0.900 297,000
Long-term Debt 2,000,000 0.900 1,800,000 0.900 1,800,000
Total Liabilities 2,330,000 2,097,000 2,097,000
Captial Stock 1,000,000 1.000 1,000,000 1.000 1,000,000
Retained Earnings 500,000 Calulation 508,400 485,200
Cumulative translation adjustment (135,200)
Total Equity 1,500,000 1,508,400 1,350,000
Total Liabilities and Equity 3,830,000 3,605,400 3,447,000
* Inventory is carried at FIFO cost, ending inventory was acquired evenly throughout the month of Decemeber
Income Statement Temporal Method Current Rate Method
2010 in Euro USD
Sales 8,000,000 0.950 7,600,000 0.950 7,600,000
Costs of goods sold 6,000,000 Calulation 5,762,000 0.950 5,700,000
Selling and administrative expense 500,000 0.950 475,000 0.950 475,000
Depreciation expense 200,000 0.980 196,000 0.950 190,000
Interest expense 180,000 0.950 171,000 0.950 171,000
Income before taxs 1,120,000 996,000 1,064,000
Income tax 280,000 0.950 266,000 0.950 266,000
Remeasurement Gain Calulation 91,200
Net income 840,000 821,200 798,000
Statement of Retained Earnings Temporal Method Current Rate Method
2010 in Euro Translation Rate in USD Translation Rate in USD
Retained earnings, 1/1/2010 0.00 Calulation from1 1
0 Calulation from 0.00
Net income 840,000 Income 821,200 Income 798,000
Less: Dividends 12/1/2010 340,000 Statement 0.92 312,800 Statement
0.920 312,800
Retained earnings, 31/12/2010 500,000 508,400 485,200

For Temporal Method

Calulation for COGs In Euro Translation Rate in USD
Beginning inventory 600,000 1.00 600,000
Plus: Purchases 6,200,000 0.95 5,890,000
Less: Ending Inventory 800,000 0.91 728,000
Cost of goods solds 6,000,000 5,762,000
 Exchange rate ($)
1-Jan-10 1.000 H
Average for the month of
1.000 A/H
January
Average
Rate when2010 (A) and
property 0.950 A
equipment were acquired and
long-term debt was incurred, 0.980 H
Rate when patent was
Jan
Rate15, 2010
when (H)
dividends 0.970 H
acquired, Feb 1, 2010were
(H)
declared, Dec 1, 2010 (H) 0.920 H
Average for the month of
0.910 A/H
December
12/31/2010 ( C) 0.900 C

Euro Rate USD

Begnining 1,000,000 1 1,000,000
Mar-01 200,000 1.1 220000
Oct-01 -200000 1.2 -240000
980,000
Capital stock in USD in ending??

3,605,400
 Juarez, Balance Sheet, Jan 1, 2014
Pound Exchange rate ($)
Assets January 1, 2014 1.30
Cash 30 Average 2014 1.31
Rate when dividends were declared,
Inventory 20 Dec 1, 2014 1.31
Rate when plan and equipment were
acquired and long-term debt was
Total Assets 50 incurred, Jan 15, 2014 1.32
Captial Stock 50 Average of December, 2014 1.32
Total Liabilities and Equity 50 December 31, 2014 1.33
31-Dec-14 Temporal Method Current Rate Method
in Pound Translation Rate in USD Translation Rate
Assets
Cash 50 1.330 66.50 1.330
Account Receivable 100 1.330 133.00 1.330
Inventory* 72 1.320 95.04 1.330
Plan and equipment 300 1.320 396.00 1.330
Accumulated Depreciation (70) 1.320 (92.40) 1.330
Total Assets 452 598.14
Liabilites and Equity
Account Payable 186 1.330 247.38 1.330
Total Liabilities 186 247.38
Captial Stock 50 1.310 65.50 1.310
Retained Earnings 216 Calulation 285.76
Cumulative translation adjustment (Current rate method) (0.50)
Total Equity 266 350.76
Total Liabilities and Equity 452 598.14
 * Inventory is carried at FIFO cost, ending inventory was acquired evenly throughout the month of Decemeber

Income Statement Temporal Method Current Rate Method

2014 in Pound Translation Rate in USD Translation Rate
Sales 540 1.310 707.40 1.310
Costs of goods sold 310 Caclulation 405.18 1.310
Operating expenses 108 1.310 141.48 1.310
Income before taxs 122 160.74 1.310
Tax expense 40 1.310 52.40 1.310
Remeasurement Gain (Temporal Method) Calulation 3.42
Net income 82 111.76
Statement of Retained Earnings Temporal Method Current Rate Method
2014 in Pound Translation Rate in USD Translation Rate
Retained earnings, 1/1/2014 154 1.30 200.20 1.30
Calulation from Calulation from
Net income 82 111.76
Income Statement Income Statement
Less: Dividends 01/12/2014 (20) 1.31 (26.20) 1.310
Retained earnings, 31/12/2014 216 285.76

For Temporal Method

Calulation for COGs In Pound Translation Rate in USD
Beginning inventory 20 1.30 26.00
Plus: Purchases 362 1.31 474.22
Less: Ending Inventory 72 1.32 95.04
Cost of goods solds 310 405.18
e rate ($)

urrent Rate Method

in USD

66.50
133.00
95.76
399.00
(93.10)
601.16

247.38
247.38
65.50
281.42
6.86
353.78
601.16
Decemeber

urrent Rate Method

in USD
707.40
406.10
141.48
159.82
52.40

107.42
urrent Rate Method
in USD
200.20
107.42
(26.20)
281.42
Sunsquare Company was created as a wholly owned subsidiary of Times Corporation (a US based company) on January 1, 2021.
On that date, Times Corporation invested USD50,000 in Sunsquare's capital stock. Given the exchange rate on that date of 1400 Won per USD.
Sunsquare's Balance sheet at Jan 1, 2021 in Won as follows:
Balance sheet at Jan 1, 2021
Won
Cash 70,000,000
Total assets 70,000,000
Capital stock 70,000,000 Calculation for Capital stock
Total liabilities and equity 70,000,000
Beginning
Relevant USD exchange rates for the Won for 2021 are as follows: Added
Ending
January 1, 2021 1400 1400 won = 1 usd For Temporal Method
Average
Rate whenforPPE
2021were acquired and long-term 1420 Calulation for COGs
debt was incurred on Jan 10, 2021 1410 Beginning inventory
Rate when dividends
Rate when capital waswere
increased FebDec
declared. 25, 2021
1, 1415 Plus: Purchases
2021 1425 Less: Ending Inventory
Average for the month of December 2021 1430 Cost of goods solds
December 31, 2021 1440

Sunsquare's Won denominated financial statements for the year ended December 31, 2021 are as follows:

Income statement for 2021 Temporal rate method Current rate method
Won Translation rate in USD Translation rate
Sales 55,000,000 1,420 38,732.39 1420
COGS (30,000,000) (21,230) 1420
Selling and administrative expenses (11,000,000) 1420 (7,746.48) 1420
Depreciation expense (1,000,000) 1410 -709.2198582 1420
Interest expense (2,000,000) 1420 (1,408.45) 1420
Income before tax 11,000,000 7,638.07
Income taxes (2,200,000) 1420 (1,549.30) 1420
Remeasurement gain/loss (808.49)
Net income 8,800,000 5,280.28

Statement of Retained Earnings for 2021 Temporal rate method Current rate method
Won Translation rate in USD Translation rate
Retained earnings, 1/1/2021 0 1400
Add: Net income 8,800,000 5,280.28
Less: Dividend (4000000) 1425 -2807 1425
Retained earnings, 31/12/2021 4,800,000 2,473.26

Temporal rate method Current rate method

Won Translation rate in USD Translation rate
Cash 30,000,000 1,440 20,833.33 1,440
Account receivable 15,000,000 1,440 10,416.67 1,440
Inventory 21,000,000 1430 14,685.31 1,440
PPP 55,000,000 1410 39,007.09 1,440
Accumulated depreciation (1,200,000) 1410 (851.06) 1,440
Total assets 119,800,000 84,091.34

Account payable 10,000,000 1,440 6,944.44 1,440

Long-term debt 5,000,000 1,440 3,472.22 1,440
Cumulative translation adjustment
Capital stock 100,000,000 71201
RE 4,800,000 2,473.26
Total Liabilties and Equity 119,800,000 84,091.34

Additional information:

(1) Inventory is carried at FIFO cost. Opening inventory was purchased on Jan 1, 2021. Ending inventory was acquired evenly throughout the month of De

(2) 30.000.000 Won additional capital was raised on Feb 25, 2020
Require: Translate the financial statements
a. Current rate method
b. Temporal method
on per USD.

FC translation rate USD

70,000,000 1400 50000

30,000,000 1415 21201
100,000,000 71201

In Euro Translation Rate in USD

51,000,000 1,420.00 35,915

21,000,000 1,430.00 14,685
30,000,000 21,230

in USD
38,732.39
(21,126.76)
(7,746.48)
(704.23)
(1,408.45)
7,746
(1,549.30)
 6,197 -

in USD
0
6,197
-2807
3,390

in USD
20833
10417
14583
38194
-833
83194

6944
3472
1814
71201
3390
83194

ughout the month of December.

 Balance sheet Dec 31, 20X1
Euro translation rate USD Current rate method
Cash 750000 1.25 937500
A/R 600000 1.25 750000 Assets €
Inventory 800000 1.25 1000000 Cash 400,000
PPE 2000000 1.25 2500000 Inventory 600,000
Acc. Depn -200000 1.25 -250000 Relevant exchange rates for 20X1 are as
Patent, net 80000 1.25 100000 January 1, 20X1
Total asset 4030000 5037500 Rate when PPE are acquired and long-ter
AP 330000 1.25 412500 Rate when patent was acquired and capit
Long-term liability 2000000 1.25 2500000 Average for 20X1
Remeasurement gain/loss -148750 Rate when dividends was declared, Dec 1
Capital stock 1200000 1614000 Average for the month of Dec
RE 500000 659750 Dec 31, 20X1
Total liability +
4030000 5037500
equity

Income Statement, 20X1

Euro translation rate USD
Sales 8000000 1.3 10400000
COGS 6000000 1.3 7800000
S.A expenses 500000 1.3 650000
Depn expense 200000 1.3 260000
Amortization expens 20000 1.3 26000
Interest exp 180000 1.3 234000 Income before t 1430000
Income tax exp 275000 1.3 357500
Remeasurement gain/ -
Net income 825000 1072500

Statement of Retained earnings, 20X1

Step 2 Euro Translation rate USD
RE, 1/1/X1 - 1.35 0
Net income 825000 1072500
Dividend, 1/12/X1 325000 1.27 412750
RE, 31/12/X1 500000 659750

Calculation for COGEuro translation rate USD

opening inventory 600
Purchase 6.200.000
COGS 6.000.000
Closing inventory 800

Calculation for CapitEuro translation rate USD

Beginning 1,000,000 1.35 1350000
Added 200,000 1.32 264000
Ending 1200000 1614000
 Balance sheet Dec 31, 20X1
Euro translation rate
Liabilities Cash 750000 1.25
and € A/R 600000 1.25
Capital
Equity 1,000,000 Inventory 800000 1.26
stock
PPE 2000000 1.33
xchange rates for 20X1 are as follows: Acc. Depn -200000 1.33
1.35 Patent, net 80000 1.32
PPE are acquired and long-term debt was1.33
incurred, Jan 15, X1 Total asset 4030000
patent was acquired and capital was increased
1.32 Feb 1, X1 AP 330000 1.25
1.3 Long-term liability 2000000 1.25
dividends was declared, Dec 1, X1 1.27 Remeasurement gain/loss
or the month of Dec 1.26 Capital stock 1200000
1.25 RE 500000
Total liability + equity 4030000

Income Statement, 20X1

Euro translation rate
Sales 8000000 1.3
COGS 6000000
S.A expenses 500000 1.3
Depn expense 200000 1.33
Amortization expense 20000 1.32
Interest exp 180000 1.3
Income tax exp 275000 1.3
Remeasurement gain/loss -
Net income 825000

Statement of Retained earnings, 20X1

Step 2 Euro Translation rate
RE, 1/1/X1 - 1.35
Net income 825000
Dividend, 1/12/X1 325000 1.27
RE, 31/12/X1 500000

Calculation for COGS Euro translation rate

opening inventory 600000 1.35
Purchase 6200000 1.3
COGS 6000000
Closing inventory 800000 1.26

Calculation for Capital stock Euro translation rate

Beginning 0 0
Added 1,200,000 0
Ending 1200000
 USD Temporal rate method
937500
750000
1008000
2660000
-266000
105600
5195100
412500
2500000

1614000
668600
5195100

USD
10400000
7862000
650000
266000
26400
234000
357500 Income aft 1004100
77250
1081350

1
USD
 0
1081350
412750
668600

USD
810000
8060000
7862000
1008000

USD
0
0
0
 Balance sheet Dec 31, 20X1
Euro translation rate USD Current rate method
Cash 750000 1.25 937500
A/R 600000 1.25 750000 Assets €
Inventory 800000 1.25 1000000 Cash 400,000
PPE 2000000 1.25 2500000 Inventory 600,000
Acc. Depn -200000 1.25 -250000 Relevant exchange rates for 20X1 are a
Patent, net 80000 1.25 100000 January 1, 20X1
Total asset 4030000 5037500 Rate when PPE are acquired and long-t
AP 330000 1.25 412500 Rate when patent was acquired and cap
Long-term liability 2000000 1.25 2500000 Average for 20X1
Remeasurement gain/loss - 148,750 5,186,250 Rate when dividends was declared, Dec
Capital stock 1200000 1614000 Average for the month of Dec
RE 500000 659750 Dec 31, 20X1
Total liability +
4030000 5037500
equity

Income Statement, 20X1

Euro translation rate USD
Sales 8000000 1.3 10400000
COGS 6000000 1.3 7800000
S.A expenses 500000 1.3 650000
Depn expense 200000 1.3 260000
Amortization expens 20000 1.3 26000
Interest exp 180000 1.3 234000 Income before t 1430000
Income tax exp 275000 1.3 357500
Remeasurement gain/ -
Net income 825000 1072500

Statement of Retained earnings, 20X1

Step 2 Euro Translation rate USD
RE, 1/1/X1 - 1.35 0
Net income 825000 1072500
Dividend, 1/12/X1 325000 1.27 412750
RE, 31/12/X1 500000 659750

Calculation for COGEuro translation rate USD

opening inventory
Purchase
COGS
Closing inventory

Calculation for CapitEuro translation rate USD

Beginning
Added
Ending
 Balance sheet Dec 31, 20X1
Euro translation rate
Liabilities Cash 750000 1.25
and € A/R 600000 1.25
Capital
Equity 1,000,000 Inventory 800000 1.26
stock
PPE 2000000 1.33
xchange rates for 20X1 are as follows: Acc. Depn -200000 1.33
1.35 Patent, net 80000 1.32
PPE are acquired and long-term debt was1.33
incurred, Jan 15, X1 Total asset 4030000
patent was acquired and capital was increased
1.32 Feb 1, X1 AP 330000 1.25
1.3 Long-term liability 2000000 1.25
dividends was declared, Dec 1, X1 1.27 Remeasurement gain/loss
or the month of Dec 1.26 Capital stock 1200000
1.25 RE 500000
Total liability + equity 4030000

Income Statement, 20X1

Euro translation rate
Sales 8000000 1.3
COGS 6000000
S.A expenses 500000 1.3
Depn expense 200000 1.33
Amortization expense 20000 1.32
Interest exp 180000 1.3
Income tax exp 275000 1.3
Remeasurement gain/loss -
Net income 825000

Statement of Retained earnings, 20X1

Step 2 Euro Translation rate
RE, 1/1/X1 -
Net income 825000
Dividend, 1/12/X1 325000 1.27
RE, 31/12/X1 500000

Calculation for COGS Euro translation rate

opening inventory 600,000 1.35
Purchase 6,200,000 1.3
COGS 6000000
Closing inventory 800000 1.26

Calculation for Capital stock Euro translation rate

Beginning 1,000,000 1.35
Added 200,000 1.32
Ending 1200000
 USD Temporal rate method
937500
750000
1008000
2660000
-266000
105600
5195100
412500
2500000

1614000
668600
5195100

USD
10400000
7862000
650000
266000
26400
234000
357500
77,250 1,004,100
1081350

X1
USD
 0
1081350
412750
668600

USD
810000
8060000
7862000 1,008,000
1008000

USD
1350000
264000
1614000
Brookhurst Company (a U.S.-based company) established a subsidiary in Spain on January 1,
2020, by investing €800,000. The subsidiary’s opening balance sheet (in Euro) was as
follows:
Balance Sheet
January 1, 2010
€ €
Cash 200,000 Capital Stock 800,000
Inventory 600,000

Total Assets 800,000 Total Liabilities and Equity 800,000

Relevant exchange rates for 2020 are as follows:

Jan 1. 2020 1
Average 2020 0.95
Rate when property and equipment were acquired and long-term debt was incurred. Jan
0.98
15. 2020
Rate when capital was increased Feb 1. 2020 0.97
Rate when dividends were declared. Dec 1. 2020 0.92
Average for the month of December 0.91
December 31. 2020 0.9
The subsidiary’s financial statements for the year ended December 31. 2020 are as follows.
Income Statement
Temporal rate method
2020
€ Translation rate in USD
Sales 8,000,000 0.95 7,600,000
Costs of goods sold 6,000,000 5762000

Selling and administrative expenses 500,000 0.95 475000

Depreciation expense 200,000 0.98 196000
Interest expense 180,000 0.95 171000
Income before taxes 1,120,000 996,000
Income tax 280,000 0.95 266000
Remeasurement gain/loss 89200
Net income 840,000 819,200
 Statement of Retained Earnings
Temporal rate method
2020
€ Translation rate in USD
Retained Earnings, 1/1/2010 100,000 1 100000
Net Income 840,000 819200
Less: Dividends 01/12/2010 -440,000 0.92 -404800
Retained Earnings, 31/12/2010 500,000 514400

Balance Sheet Dec 31

2020
€ Temporal rate method
Assets Translation rate in USD
Cash 550,000 0.9 495000
Account Receivable 600,000 0.9 540000
Inventory* 800,000 0.91 728000
Property and equipment 2,080,000 0.98 2038400
Accumulated Depreciation -200,000 0.98 -196000
Total Assets 3,830,000 3605400
Liabilities and Equity
Account Payable 330,000 0.9 297000
Long-term Debt 2,000,000 0.9 1800000
Total Liabilities 2,330,000 2097000
Capital Stock 1,000,000 994000
Retained Earnings 500,000 514400
Remeasurement gain/loss
Total Equity 1,500,000 1508400
Total Liabilities and Equity 3,830,000 3605400
* Inventory is carried at FIFO cost, ending inventory was acquired evenly throughout the
month of December
Required: Translate the Spain subsidiary’s financial statements into U.S. dollars using
Temporal Method. Whereas, Remeasurement Gain is $89,200
Current rate method
Translation rate in USD
0.95 7600000
0.95 5700000 Calculation for COGS Euro translation rate USD
opening inventory 600,000 1 600000
0.95 475000 Purchase 6,200,000 0.95 5890000
0.95 190000 COGS 6,000,000 5762000 728,000
0.95 171000 Closing inventory 800,000 0.91 728000
1064000
0.95 266000 Calculation for Capital stock Euro translation rate USD

798000 Beginning 800,000 1 800000

 Added 200,000 0.97 194000
Current rate method Ending 1,000,000 994000
Translation rate in USD
1 100000
798000
0.92 -404800
493200

Current rate method

Translation rate in USD
0.9 495000
0.9 540000
0.9 720000
0.9 1872000
0.9 -180000
3447000

0.9 297000
0.9 1800000
2097000
994000
493200
-137200
1350000
3447000
Gramado Company was created as a wholly owned subsidiary of Porto Corporation (a US based
company) on January 1, 2020. On that date, Porto invested $50,000 in Gramado’s capital stock.
Given the exchange rate on that date of 0.84 Cruzeiro (Czk) per USD. Gramado’s opening balance
sheet (in Czk) was as follows:
Balance Sheet
0.84 cruzeiro = 1 usd
January 1, 2020
Czk Czk
Cash 20,000
Capital Stock 42,000
Inventory 22,000
Total Assets 42,000 Total liabilities and Equity 42,000
Relevant USD exchange rates for the Czk for Years 1 and 2 are as follows:
January 1, 2020 0.84 Czk/$
0.84
Average for 2020 0.8 0.80 Czk/$
Rate when PPE were acquired and long-
0.82 Czk/$
term debt was incurred on Jan 10, 2020 0.82
Rate when capital was increased Feb 25,
0.83 0.83 Czk/$
2020
Rate when dividends were declared. Dec 1,
0,78 Czk/$
2020 0.78
Average for the month of December 2020 0.76 0.76 Czk/$
31-Dec-20 0.75 0.75 Czk/$
Gramado’s Czk denominated financial statements for the year ended December 31, 2020 are as
follows:
Income statement
For the year ended December 31, 2020 Temporal rate method Current rate method
Czk Translation rate in USD Translationin USD
Sales 540,000 0.8 675000 0.8 675000
COGS -310,000 -381454 0.8 -387500
Selling and administrative expenses -93,000 0.8 -116250 0.8 -116250
Depreciation expense -10,000 0.82 -12195.12 0.8 -12500
Interest expense -5,000 0.8 -6250 0.8 -6250
Income before tax 122,000 158851.2 0.8 152500
Income taxes -40,000 0.8 -50000 0.8 -50000
Remeasurement gain/loss -4379.929 108851.2
Net income 82,000 104471.3 102500

Statement of Retained Earnings

For the year ended December 31, 2020 Temporal rate method Current rate method
Czk Translation rate in USD Translationin USD
Retained earnings, 1/1/2020 0 0.84 0 0.84 0
Net income 82,000 104471.3 102500
Dividends (declared on 1/12/2020) -20,000 0.78 -25641 0.78 -25641
Retained earnings, 12/31/2020 62,000 78830.29 76858.97

Balance sheet
As at 31 December 2020 Temporal rate method Current rate method
Czk Translation rate in USD Translationin USD
Cash 30,000 0.75 40000 0.75 40000
A/R 20,000 0.75 26666.67 0.75 26666.67
Inventory (1) 72,000 0.76 94736.84 0.75 96000
Plant and equipment 100,000 0.82 121951.2 0.75 133333.3
Less: acc. depn -10,000 0.82 -12195.12 0.75 -13333.33
Total asset 212,000 271159.6 282666.7
Account payable 30,000 0.75 40000 0.75 40000
Long-term Debt 65,000 0.75 86666.67 0.75 86666.67
Capital stock (2) 55,000 65662.65 65662.65
Retained earnings, 12/31/2020 62,000 78830.29 76858.97
Remeasurement gain/loss 13478.38
Total liabilities and stockholders’ equity 212,000 271159.6 282666.7

Additional information:
(1) Inventory is carried at FIFO cost. Opening inventory was purchased on Jan 1, 2020. Ending
inventory was acquired evenly throughout the month of December.
(2) 13,000 Czk additional capital was raised on Feb 25, 2020
Required: Please choose one of the following
1. Translate Gramado Czk denominated financial statements into USD, assuming that Czk is the
primary currency that Gramado uses in its day-to-day operations.
2 Appying for students with EVEN student ID numbers
Translate Gramado Czk denominated financial statements into USD, assuming that USD is the
primary currency that Gramado uses in its day-to-day operations
Calculation for COGS Euro translation rate USD

opening inventory 22,000 0.84 26190.48

Purchase 360,000 0.8 450000
COGS 310,000 381454 94,737
Closing inventory 72,000 0.76 94736.84

Calculation for Capital stock Euro translation rate USD

Beginning 42,000 0.84 50000

Added 13,000 0.83 15662.65
Ending 65662.65
Gramado Company was created as a wholly owned subsidiary of Porto Corporation (a US based
company) on January 1, 2020. On that date, Porto invested $50,000 in Gramado’s capital stock.
Given the exchange rate on that date of 0.84 Cruzeiro (Czk) per USD. Gramado’s opening balance
sheet (in Czk) was as follows:
Balance Sheet
0.84 cruzeiro = 1 usd
January 1, 2020
Czk Czk
Cash 20,000
Capital Stock 42,000
Inventory 22,000
Total Assets 42,000 Total liabilities and Equity 42,000
Relevant USD exchange rates for the Czk for Years 1 and 2 are as follows:
January 1, 2020 0.84 Czk/$
0.84
Average for 2020 0.8 0.80 Czk/$
Rate when PPE were acquired and long-
0.82 Czk/$
term debt was incurred on Jan 10, 2020 0.82
Rate when capital was increased Feb 25,
0.83 0.83 Czk/$
2020
Rate when dividends were declared. Dec 1,
0,78 Czk/$
2020 0.78
Average for the month of December 2020 0.76 0.76 Czk/$
31-Dec-20 0.75 0.75 Czk/$
Gramado’s Czk denominated financial statements for the year ended December 31, 2020 are as
follows:
Income statement
For the year ended December 31, 2020 Temporal rate method Current rate method
Czk Translation rate in USD Translationin USD
Sales 540,000 0.8 675000 0.8 675000
COGS -310,000 -381454 0.8 -387500
Selling and administrative expenses -93,000 0.8 -116250 0.8 -116250
Depreciation expense -10,000 0.82 -12195.12 0.8 -12500
Interest expense -5,000 0.8 -6250 0.8 -6250
Income before tax 122,000 158851.2 152500
Income taxes -40,000 0.8 -50000 0.8 -50000
Remeasurement gain/loss -4379.929 108851.2
Net income 82,000 104471.3 102500

Statement of Retained Earnings

For the year ended December 31, 2020 Temporal rate method Current rate method
Czk Translation rate in USD Translationin USD
Retained earnings, 1/1/2020 0 0 0.84 0
Net income 82,000 104471.3 102500
Dividends (declared on 1/12/2020) -20,000 0.78 -25641 0.78 -25641
Retained earnings, 12/31/2020 62,000 78830.29 76858.97

Balance sheet
As at 31 December 2020 Temporal rate method Current rate method
Czk Translation rate in USD Translationin USD
Cash 30,000 0.75 40000 0.75 40000
A/R 20,000 0.75 26666.67 0.75 26666.67
Inventory (1) 72,000 0.76 94736.84 0.75 96000
Plant and equipment 100,000 0.82 121951.2 0.75 133333.3
Less: acc. depn -10,000 0.82 -12195.12 0.75 -13333.33
Total asset 212,000 271159.6 282666.7
Account payable 30,000 0.75 40000 0.75 40000
Long-term Debt 65,000 0.75 86666.67 0.75 86666.67
Capital stock (2) 55,000 65662.65 65662.65
Retained earnings, 12/31/2020 62,000 78830.29 76858.97
Remeasurement gain/loss 13478.38 269188.3
Total liabilities and stockholders’ equity 212,000 271159.6 282666.7

Additional information:
(1) Inventory is carried at FIFO cost. Opening inventory was purchased on Jan 1, 2020. Ending
inventory was acquired evenly throughout the month of December.
(2) 13,000 Czk additional capital was raised on Feb 25, 2020
Required: Please choose one of the following
1. Translate Gramado Czk denominated financial statements into USD, assuming that Czk is the
primary currency that Gramado uses in its day-to-day operations.
2 Appying for students with EVEN student ID numbers
Translate Gramado Czk denominated financial statements into USD, assuming that USD is the
primary currency that Gramado uses in its day-to-day operations
Calculation for COGS Euro translation rate USD

opening inventory 22,000 0.84 26190.48

Purchase 360,000 0.8 450000
COGS 310,000 381454 94,737
Closing inventory 72,000 0.76 94736.84

Calculation for Capital stock Euro translation rate USD

Beginning 42,000 0.84 50000

Added 13,000 0.83 15662.65
Ending 55,000 65662.65
 Gramado's Balance sheet
CZ
Assets 1/1/2020
Cash 20000 Average for 2020

Rate when PPE were acquired and long-term debt was inccured on Jan 10, 2022
Inventory 22000
Total assets 42000 Rate when capital was increased Feb 25, 2020
Capital Stock 42000 Rate when dividends were declared Dec 1, 2020
Total Liabilities and equity 42000 Average for the month of Dec 2020
12/31/2020

INCOME STATEMENT Temporal RATE METHOD

CZ Translation rate In USD
Sales 540000 0.8 675000
COGS 310000 381453.634085213
Selling and administrative expenses 93000 0.8 116250
Depreciation expense 10000 0.82 12195.1219512195
Interest expense 5000 0.8 6250
Income before tax 122000 158851.243963567
Income taxes 40000 0.8 50000
Remeasurement gain/loss -4379.9292587126
Net income 82000 104471.314704855

Temporal RATE METHOD

STATEMENT OF RETAINED EARNING 2020 IN CZ Translation rate In USD
Retained earnings 1/1/2020 0 0
Net income 82000 104471.314704855
Dividends (declared on 1/12/2020) 20000 0.78 25641.0256410256
Retained earnings 12/31/2020 62000 78830.2890638292
 Temporal RATE METHOD
BALANCE SHEET (12/31/2020) IN CZ Translation rate In USD
Cash 30000 0.75 40000
Accounts receivable 20000 0.75 26666.6666666667
Inventory 72000 0.76 94736.8421052632
Plant and equipment 100000 0.82 121951.219512195
Accumulated depreciation 10000 0.82 12195.1219512195
Total assets 212000 271159.606332906
Accounts payable 30000 0.75 40000
Capital Stock 55000 65662.6506024097
Long-term debt 65000 0.75 86666.6666666667
Cummulative translation adjustment
Retained earnings, 12/31/2020 62000 78830.2890638292
Total liabilities and stockholder's equity 212000 271159.606332906
 EXCHANGE RATE (CZ/$)
0.84
0.8

m debt was inccured on Jan 10, 2022 0.82

020 0.83
2020 0.78
0.76
0.75

Current rate method

Translation rate In USD
0.8 675000
0.8 387500
0.8 116250 Calculation for COGS Euro
0.8 12500 opening inventory 22,000
0.8 6250 Purchase 360,000
152500 108851.2 COGS 310,000
0.8 50000 Closing inventory 72,000

102500
Calculation for Capital stock Euro

Current rate method Beginning 42,000

Translation rate In USD Added 13,000
0.84 0 Ending 55,000
102500
0.78 25641.03
76858.97
 Current ra
In USD Translation In USD
40000 0.75 40000
26666.6666666667 0.75 26666.67
94736.8421052632 0.75 96000
121951.219512195 0.75 133333.3
12195.1219512195 0.75 13333.33
271159.606332906 282666.7
40000 0.75 40000
65662.6506024097 65662.65
86666.6666666667 0.75 86666.67
13478.38
78830.2890638292 76858.97
271159.606332906 282666.7
translation rate USD
0.84 26190.476
0.8 450000
381453.63
0.76 94736.842

translation rate USD

0.84 50000
0.83 15662.651
65662.651
XYZ company (an US based company) established a subsidiary in South Africa on January 1, Year 1, by investing 300,000 South African rand when the e
On that date, the foreign subsidiary borrowed ZAR 500,000 from local banks on a 15-year note to finance the acquisition of plant and equipment. The subs
Balance sheet January 1, Year 1
Items ZAR Items ZAR
Long-
Cash 300,000 500,000
term debt
Capital
PPE 500,000 300,000
stock
Total 800,000 Total 800,000
Income
January 1, Year 1:
statement Temporal rate methoCurrent rate method
ZAR Translationin USD Translationin USD June 1, Year 1:
Sales 1,000,000 0.096 96000 0.096 96000 Average for Year 1:
Cost of
-600,000 November 15, Year
goods sold -56520 0.096 -57600
Gross
400,000 December 1, year 1:
profit 39480 38400
Depreciati
on -50,000 December 31, Year 1
expenses 0.096 -4800 0.096 -4800
Other
operating -150,000
expenses -14400 0.096 -14400
Income
200,000 Calculatio
before tax 20280 19200 ZAR
Income
-90,000 1st payme
taxes -8640 0.096 -8640 Remeasurement gain/loss -5940 20000
Net
110,000 2nd paym
Income 5700 10560 10560 20000
Statement
Total
of RE Temporal rate methoCurrent rate method 40000
ZAR Translationin USD Translationin USD
Retained
earnings 0 Calculati
1/1/Y1 0 0 ZAR
Net
110,000 5700 10560 Beginning 500,000
Income
Dividends
Retained -40,000 4000 4000 Less 50,000
earnings 70,000 1700 6560 Ending 450,000
31/12/Y1 Temporal rate methoCurrent rate method
Balance
Translationin USD Translationin USD
sheet
Cash 80,000 0.11 8800 0.11 8800
Receivabl
150,000 0.11 16500 0.11 16500
es
Inventory 270,000 0.1 27000 0.11 29700
PPE (net) 450,000 40200 0.11 49500
Total
950,000 92500 104500
assets
Accounts
80,000 0.11 8800 0.11 8800
payable
Long-term
500,000 0.11 55000 0.11 55000
debt
Common
Retained 300,000 27000 0.09 27000
stock
Total
earnings
Remeasur 70,000 1700 6560
liabilities
31/12/Y1
ement 7140 104500
and
loss/gain 950,000 92500 104500 97360
stockhold
ers’
equity
African rand when the exchange rate was USD $0.09/ZAR 1.
d equipment. The subsidiary’s opening balance sheet (in ZAR) was as follows:

0.09 usd = 1 zar

USD/ZAR

0.09
0.095 Dividends in the amount of ZAR 20,000 were paid to the parent on June 1 and December 1.
0.096 Inventory was acquired evenly throughout the year, with ending inventory acquired on November 15, Year 1.

0.1

0.105

0.11

Rate USD

0.095 1900

0.105 2100
 4000

Rate USD Calculation for COGS

0.09 45000 Beginning
0.096 4800 Purchase 870,000 0.096 83520
40200 Ending 270,000 0.1 27000
COGS 600,000 56520
Gramado Company was created as a wholly owned subsidiary of Porto Corporation (a US based
company) on January 1, 2020. On that date, Porto invested $56,000 in Gramado’s capital stock.
Given the exchange rate on that date of 0.70 Cruzeiro (Czk) per USD. Gramado’s opening balance
sheet (in Czk) was as follows:
Relevant USD exchange rates for the Czk for Years 1 and 2 are as follows:
January 1 Y1
1 Cz = 0.7 USD
0.7
Average for Y1 0.72
Dec 31 Y1 0.73
Average for Y2 0.75
Dec 1 Y2 0.8
Dec 31 Y2 0.82
Average for Dec Y2 0.81
Gramado’s Czk denominated financial statements for the Y2 are as follows

Income statement
For the year ended December 31, 2020 Temporal rate method Current rate method
Czk Translation rate in USD Translation rate in USD
Sales 600,000 0.75 450000 0.75 450000
COGS -350,000 0.75 -262500 0.75 -262500
Operating expenses -120,000 0.75 -90000 0.75 -90000
Income before tax 130,000 97500 97500
Income taxes -44,200 -33150 0.75 -33150
Remeasurement gain/loss 4376 64350
Net income 85,800 68726 64350

Statement of Retained Earnings

For the year ended December 31, 2020 Temporal rate method Current rate method
Czk Translation rate in USD Translation rate in USD
Retained earnings, 1/1/Y2 150,000 109500 0.73 109500
Net income 85,800 68726 64350
Dividends (declared on 1/12/Y2) -20,000 -16000 0.8 -16000
Retained earnings, 12/31/Y2 215,800 162226 157850

Balance sheet
As at 31 December 2020 Temporal rate method Current rate method
Czk Translation rate in USD Translation rate in USD
Cash 80,000 0.82 65600 0.82 65600
A/R 75,000 0.82 61500 0.82 61500
Inventory (1) 78,000 0.81 63180 0.82 63960
Plant and equipment 260,000 0.73 189800 0.82 213200
Less: acc. depn -70,000 0.73 -51100 0.82 -57400
Total asset 423,000 328980 346860
Liabilities 172,200 0.82 141204 0.82 141204
Capital stock (2) 35,000 25550 0.73 25550
Retained earnings, 12/31/2020 215,800 162226 157850
Remeasurement gain/loss 22256 324604
Total liabilities and stockholders’ equity 423,000 328980 346860

Additional information:
(1) Inventory is carried at FIFO cost. Opening inventory was purchased on Jan 1, 2020. Ending
inventory was acquired evenly throughout the month of December.
(2) 13,000 Czk additional capital was raised on Feb 25, 2020
Required: Please choose one of the following
1. Translate Gramado Czk denominated financial statements into USD, assuming that Czk is the
primary currency that Gramado uses in its day-to-day operations.
2 Appying for students with EVEN student ID numbers
Translate Gramado Czk denominated financial statements into USD, assuming that USD is the
primary currency that Gramado uses in its day-to-day operations
Calculation for COGS Euro translation rate USD
opening inventory
Purchase
COGS
Closing inventory

Calculation for Capital stock Euro translation rate USD

Beginning
Added
Ending
Hardy Company is a wholly owned subsidiary of Stephine Corporation on January 1, 2021.
Hardy operates in a foreign in Switzerland. Financial statements for the year 2021 are as follows
At the time of the combination, subsidiary's retained earnings were 200,000 (CHF).
Relevant USD exchange rates for the Czk for Years 1 and 2 are as follows:
January 1 2019
0.8542
Jan 1 2021 1.0451
Sep 1 2021 1.1572
Dec 31 2021 1.1762
Average for 2021 1.1106
Average for last 3 months of 2021 1.1667
Average for last 3 months of 2020 1.0223
Income statement
For the year ended December 31, 2020 Temporal rate method Current rate method
Czk Translation rate in USD Translation rate in USD
Sales 380,000 1.1106 422028 1.1106 422028
COGS -100,000 -164040.5 1.1106 -111060
Depreciation expenses -40000 1.1106 -44424 1.1106 -44424
Other expenses -90,000 1.1106 -99954 1.1106 -99954
Income taxes -100,000 1.1106 -111060 1.1106 -111060
Remeasurement gain/loss 69916.5 2549.5
Net income 50,000 72466 55530

Statement of Retained Earnings

For the year ended December 31, 2020 Temporal rate method Current rate method
Czk Translation rate in USD Translation rate in USD
Retained earnings, 1/1 200,000 1.0451 209020 1.0451 209020
Net income 50,000 72466 55530
Dividends (declared on 9-1) -60,000 1.1572 -69432 1.1572 -69432
Retained earnings, 12/31 190,000 212054 195118
Balance sheet
As at 31 December 2020 Temporal rate method Current rate method
Czk Translation rate in USD Translation rate in USD
Cash 90,000 1.1762 105858 1.1762 105858
A/R 100,000 1.1762 117620 1.1762 117620
Inventory (1) 40,000 1.0223 40892 1.1762 47048
Land 100,000 1.1106 111060 1.1762 117620
Building net 200,000 1.1106 222120 1.1762 235240
Equipment net 180,000 1.1106 199908 1.1762 211716
Total asset 710,000 797458 835102
A/P 80,000 1.1762 94096 1.1762 94096
Bonds payable 140,000 1.1762 164668 1.1762 164668
Capital stock (2) 200,000 1.0451 209020 1.0451 209020
Additional paid-in capital 100,000 1.1762 117620 1.1762 117620
Retained earnings, 12/31/2020 190,000 212054 195118
Remeasurement gain/loss 54580 780522
Total liabilities and stockholders’ equity 710,000 797458 835102

Additional information:
(1) Hardy uses the FIFO method of inventory valuation and its ending inventory in both 2020 and 2021 wa purchased in the last quarter of the year.
Beginning and ending inventory are 15,000 and 40,000 , respectively.
(2) Hardy declared dividends of 60,000 CHF on September 1, 2021.
Required: Please choose one of the following
Calculation for COGS Euro translation rate USD
opening inventory 15,000 1.0451 15676.5
Purchase 125,000 1.1106 138825
COGS 100,000 164040.5
Closing inventory 40,000 1.0223 40892

Calculation for Capital stock Euro translation rate USD

Beginning
Added
Ending
quarter of the year.
P&G Company (a U.S.-based company) established a subsidiary in Japan on January 1,
2020, by investing JPY 1,000,000. The subsidiary’s opening balance sheet (in Euro) was as
follows:
Balance Sheet
January 1, 2010
€ €
Cash 400,000 Capital Stock 1,000,000
Inventory 600,000
Total Liabilities and
Total Assets 1,000,000 1,000,000
Equity
Relevant exchange rates for 2020 are as follows:
Jan 1. 2020 135.96 JPY = 1 USD
Average 2020 135.94
Rate when property and equipment were acquired and long-term debt was incurred. Jan
135.91
15. 2020
Rate when capital was increased Feb 1. 2020 135.92
Rate when dividends were declared. Dec 1. 2020 135.98
Average for the month of December 135.9
December 31. 2020 135.97
The subsidiary’s financial statements for the year ended December 31. 2020 are as follows.
Income Statement
Temporal rate method Current rate method
2020
JPY Translationin USD Translationin USD
Sales 3,980,000 135.94 29,278 135.94 29277.62
Costs of goods sold -3,100,000 -22802.857843058 135.94 -22804.18

Selling and administrative expenses -640,000 135.94 -4707.9593938502 135.94 -4707.959

Depreciation expense -30,000 135.91 -220.7343094695 135.94 -220.6856
Interest expense -20,000 135.94 -147.12373105782 135.94 -147.1237
Income before taxes 190,000 1,399 1397.675
Income tax -50,000 135.94 -367.80932764455 135.94 -367.8093
Remeasurement gain/loss -1 1,031
Net income 140,000 1,031 1029.866
Statement of Retained Earnings
Temporal rate method Current rate method
2020
JPY Translationin USD Translationin USD
Retained Earnings, 1/1/2010 100,000 135.96 735.510444248308 135.96 735.5104
Net Income 140,000 1030.54295876466 1029.866
Less: Dividends 01/12/2010 -101,000 135.98 -742.75628768937 135.98 -742.7563 1023.297
Retained Earnings, 31/12/2010 139,000 1023.29711532361 1022.62 1022.62

Balance Sheet Dec 31

2020
JPY Temporal rate method Current rate method
Assets Translationin USD Translationin USD
Cash 2,200,000 135.97 16180.0397146429 135.97 16180.04
Account Receivable 395,000 135.97 2905.05258512907 135.97 2905.053
Inventory* 310,000 135.9 2281.08903605592 135.97 2279.915
Property and equipment 337,000 135.91 2479.58207637407 135.97 2478.488
Accumulated Depreciation -56,000 135.91 -412.0373776764 135.97 -411.8556
Total Assets 3,186,000 23433.7260345256 23431.64
Liabilities and Equity
Account Payable 350,000 135.97 2574.09722732956 135.97 2574.097
Long-term Debt 1,500,000 135.97 11031.8452599838 135.97 11031.85
Total Liabilities 1,850,000 13605.9424873134 13605.94
Capital Stock 1,197,000 8804.48643188862 8804.486
Retained Earnings 139,000 1023.29711532361 1022.62
Remeasurement gain/loss -1.409861 9827.107
Total Equity 1,336,000 9827.78354721222 9825.697
Total Liabilities and Equity 3,186,000 23433.7260345256 23431.64
* Inventory is carried at FIFO cost, ending inventory was acquired evenly throughout the
month of December
Required: Translate the Spain subsidiary’s financial statements into U.S. dollars using
 310,000

Calculation for COGS Euro translation rate USD

opening inventory 600,000 135.96 4413.063
Purchase 2,810,000 135.94 20670.88
COGS 3,100,000 22802.86
Closing inventory 310,000 135.9 2281.089 2,281

Calculation for Capital stock Euro translation rate USD

Beginning 1,000,000 135.96 7355.104

Added 197,000 135.92 1449.382
Ending 1,197,000 8804.486
Joe UK purchases on account from Jone US Micheal in US purchases good
Pay on 1/3/2020 X = 712320 USD 712320
1/12/2019: 1pound = 1.24 USD 1 pound = 1.24 usd Rate ( USD per SGD)
31/12/2019: 1 pound = 1.26 USD 1.26 565333.3333 15/11
1/3/2020: 1 pound = 1.3 USD 1.3 31/12
1-Jan
Joe UK Micheal in US
1-Dec 15-Nov
Dr. Inventory 574451.612903 pounds Dr. Inventory
Cr. Accounts payable 574451.6 pounds

31-Dec 31-Dec
Dr. Accounts payable 9118.27956989 pounds Dr. Loss on FX
Cr. Gain on FX 9118.28 pounds

3-Jan 1-Jan
Dr. Accounts payable 565333.333333 pounds Dr. Accounts payable
Cr. Cash 547938.5 pounds Dr. Loss on FX
Cr. Gain on FX 17394.87 pounds

Mother sells to British comp. Q5

Pay on 1/3/2020 20000 BGP US company sell products to U
Dec 1: 1 BGP = 1.54 USD 1.54 1 BGP = 1.54 USD Make journal entry for US com
Dec 31: 1 GBP = 1.49 USD 1.49 29800
Feb 1: 1 GBP = 1.52 USD 1.52 Exchange rate ( Pound / usd)
15/11/2019
Mother US 31/12/2019
1/1/2020
Dec-22
Dr. Accounts receivable 30800 USD US company
Cr. Revenue 30800 USD 15-Nov
Dr. Accounts receivable
31-Dec
Dr. Loss on FX 1000
Cr. Accounts receivable 1000 31-Dec
Dr. Accounts receivable
1-Feb
Dr. Cash 30400
Cr. Accounts receivable 29800 1-Jan
Cr. Gain on FX 600 Dr. Cash

Keefer (U.S) sells to Canadian company

Pay on Oct 15 USD/CAD 100000 USD Keefer (U.S) sells to Canadian
September 1,2019 1.39 1 USD = 1.39 CAD 139000 CAD Pay on Oct 15
September 15,2019 1.4 99285.71429 September 1,2019
October 15,2019 1.41 September 15,2019
October 15,2019
Keefer company
1-Sep Keefer company
Dr. Accounts receivable 100000 USD 1-Sep
Cr. Revenue 100000 USD Dr. Accounts receivable

15-Sep
Dr. Loss on FX 714.285714286 USD 15-Sep
 Cr. Accounts receivable 714.285714286 USD Dr. Loss on FX

15-Oct
Dr. Cash 98581.5602837 USD 15-Oct
Dr. Loss on FX 704.154002026 USD Dr. Cash
Cr. Accounts receivable 99285.7142857 USD

Topica (UK) sells to Eximco (US) Topica (UK) sells to Eximco (U

Pay on Mar 1 20000 USD Pay on Mar 1
Dec-01 1.3 USD = 1 GBP Spot rate
Dec-31 1.32 15151.51515 Dec-18
Mar-01 1.29 Dec-18
1-Feb-19
Topica Topica
1-Dec 1-Dec
Dr. Accounts receivable 15384.6153846 GBP Dr. Accounts receivable
Cr. Revenue 15384.6153846 GBP

31-Dec 31-Dec
Dr. Loss on FX 233.1002331 GBP Dr. Loss on FX
Cr. Accounts receivable 233.1002331 GBP

1-Mar 1-Mar
Dr. Cash in bank 15503.875969 GBP Dr. Cash in bank
Cr. Accounts receivable 15151.5151515 GBP Dr. Loss on FX
Cr. Gain on FX 352.360817477 GBP
Topica (UK) sells to Eximco (US) Topica (UK) sells to Eximco (U
Pay on Mar 1 20000 USD Pay on Mar 1
Spot rate Case 2 Spot rate
Dec-18 $1,3 per £ 1.3 Dec-18
Dec-18 $1,28 per £ 1.28 15625 Dec-18
1-Feb-19 $1,25 per £ 1.25 1-Feb-19
Topica Topica
1-Dec 1-Dec
Dr. Accounts receivable 15384.6153846 GBP Dr. Accounts receivable
Cr. Revenue 15384.6153846 GBP

31-Dec 31-Dec
Dr. Accounts receivable 240.384615385 Dr. Loss on FX
Cr. Gain on FX 240.384615385

1-Mar 1-Mar
Dr. Cash in bank 16000 Dr. Cash in bank
Cr. Accounts receivable 15625
Cr. Gain on FX 375

Topica (UK) purchases from Eximco (US) Topica (UK) purchases from E
Pay on Feb 1 20000 USD Pay on Feb 1
Spot rate Case 1 1.3 usd = 1 gbp Spot rate
Dec-18 $1,3 per £ 1.3 Dec-18
Dec-18 $1,32 per £ 1.32 15151.51515 Dec-18
 1-Feb-19 $1,35 per £ 1.35 1-Feb-19
Topica Topica
1-Dec 1-Dec
Dr. Inventory 15384.6153846 GBP Dr. Inventory
Cr. Accounts payable 15384.6153846 GBP

31-Dec 31-Dec
Dr. Accounts payable 233.1002331 Dr. Loss on FX
Cr. Gain on FX 233.1002331

1-Mar 1-Mar
Dr. Accounts payable 15151.5151515 Dr. Accounts payable
Cr. Cash in bank 14814.8148148 Dr. Loss on FX
Cr. Gain on FX 336.7003367

Topica (UK) purchases from Eximco (US) Keefer (US) sells to UK compa
Pay on Feb 1 20000 USD Pay on Jan 1
Spot rate Case 3 1.3 usd = 1 gbp Spot rate
Dec-18 $1,3 per £ 1.3 September 15,
Dec-18 $1,32 per £ 1.32 15151.51515 December 31,2
1-Feb-19 $1,28 per £ 1.28 1-Jan-20
Topica Keefer
1-Dec 1-Sep
Dr. Inventory 15384.6153846 GBP Dr. Accounts receivable
Cr. Accounts payable 15384.6153846 GBP

31-Dec 31-Dec
Dr. Accounts payable 233.1002331 Dr. Accounts receivable
Cr. Gain on FX 233.1002331
 1-Mar 1-Jan
Dr. Accounts payable 15151.5151515 Dr. Cash in bank
Dr. Loss on FX 473.484848485
Cr. Cash in bank 15625

Keefer (US) sells to UK company Vin Company (VN) purchases

Pay on Jan 1 20000 USD Pay on Jan 1
Spot rate GBP/USD 1GBP = 1.23 USD 16000 GBP Spot rate
September 15 1.25 October 1,2019
December 31, 1.23 19680 October 30,2019
1-Jan-20 1.24
Keefer Vin Company
1-Sep 1-Oct
Dr. Accounts receivable 20000 USD Dr. Inventory
Cr. Revenue 20000 USD

31-Dec 30-Oct
Dr. Loss on FX 320 Dr. Accounts payable
Cr. Accounts receivable 320

1-Jan
Dr. Cash in bank 19840
Cr. Accounts receivable 19680
Cr. Gain on FX 160
Vin Company (VN) purchases from JP company Joe (UK) sells to Jone (US)
Pay on Jan 1 50000 JPY Pay on Mar 1
Spot rate VND/JPY 1 JPY = 212.54 VND Spot rate
October 1,2019 209.2 Dec-01
October 30,2019 210.5 Dec-31
1-Mar-01
Vin Company Joe (UK)
1-Oct 1-Sep
Dr. Inventory 10460000 VND Dr. Accounts receivable
Cr. Accounts payable 10460000 VND

30-Oct 31-Dec
Dr. Accounts payable 10460000 Dr. Loss on FX
Dr. Loss on FX 65000
Cr. Cash in bank 10525000
1-Jan
Dr. Cash in bank
Dr. Loss on FX

Joe (UK) purchases from Jone (US) Joe (UK) purchases from Jone
Pay on Mar 1 70000 USD Pay on Mar 1
Spot rate GBP/USD 1GBP = 1.24 USD 56451.6129 GBP Spot rate
Dec-01 1.24 Dec-01
Dec-31 1.26 55555.55556 Dec-31
1-Mar-01 1.3 1-Mar-01
Joe (UK) Jone (US)
1-Sep 1-Sep
Dr. Inventory 56451.6129032 USD Dr. Accounts receivable
 Cr. Accounts payable 56451.6129032 USD

31-Dec 31-Dec
Dr. Accounts payable 896.05734767 Dr. Accounts receivable
Cr. Gain on FX 896.05734767

1-Jan 1-Jan
Dr. Accounts payable 55555.5555556 Dr. Cash in bank
Cr. Gain on FX 1709.4017094
Cr. Cash in bank 53846.1538462

Joe (UK) sells to Jone (US) Spot rate

Pay on Mar 1 70000 USD Dec-01
Spot rate GBP/USD 1GBP = 1.24 USD 56451.6129 GBP Dec-31
Dec-01 1.24
Dec-31 1.26 71129.03226
1-Mar-01 1.3 Spot rate
Jone (US) Dec-18
1-Sep 1-Feb-19
Dr. Inventory 70000 USD
Cr. Accounts payable 70000 USD

31-Dec
Dr. Loss on FX 1129.03225806
Cr. Accounts payable 1129.03225806

1-Jan
Dr. Accounts payable 71129.0322581
Dr. Loss on FX 2258.06451613
 Cr. Cash in bank 73387.0967742

Rose Co has fixed assets information as below: Eximco (UK) sells to Rose (US)
Jan 1, Year 1. Purchase £2,000 PPE with rate of $1 per £ 2000 1 Pay on Mar 1
Jan 1, Year 2. Purchase £2,400 PPE with rate of $1,2 per £ 2400 1.2 Dec-01
Both equipment have a five year useful life. Dec-31
Average exchange rate for year 2 is $1.1 per £ 1.1 Mar-01
At Dec 31, Year 2, Exchange rate is $1.3 per £ 1.3
Required: Eximco
1-Dec
A, Determine assets value (asset costs) on Dec 31, year 2 in parent currency ($) Dr. Accounts receivable
B, Determine accumulated depreciation on Dec 31, year 2 in $

a. Current rate method 31-Dec

Equipment 1 £ Translation$ Equipment 2 £ Translation$ Dr. Loss on FX
Cost 2,000 1.3 1538.462 Cost 2,400 1.3 1846.153846
Acc.depn 800 1.3 615.3846 Acc.depn 480 1.3 369.2307692
Carrying amou 1,600 1.3 1230.769 Carrying amount 1,920 1.3 1476.923077 1-Mar
Depn expense 400 1.3 307.6923 Depn expense 480 1.3 369.2307692 Dr. Cash in bank
b. Temporal method Dr. Loss on FX
Equipment 1 £ Translation$ Equipment 2 £ Translation$
Cost 2,000 1 2000 Cost 2,000 1.2 1666.666667
Acc.depn 800 1 800 Acc.depn 800 1.2 666.6666667
Carrying amou 1,600 1.3 1230.769 Carrying amount 1,600 1.3 1230.769231
Depn expense 400 1.1 363.6364 Depn expense 400 1.1 363.6363636

Daisy (VN) sells to Rose (US) Naser (Kuwaiti) sells to Safar (

Pay on Feb 1 5000 USD Pay on Mar 2
Dec-01 22730 VND = 1 USD Dec-01
 Dec-31 22720 113600000 Dec-31
Mar-01 22740 Mar-01

Daisy Naser
1-Dec 1-Dec
Dr. Accounts receivable 113650000 GBP Dr. Accounts receivable
Cr. Revenue 113650000 GBP

31-Dec 31-Dec
Dr. Loss on FX 50000 GBP Dr. Accounts receivable
Cr. Accounts receivable 50000 GBP

1-Mar 1-Mar
Dr. Cash in bank 113700000 GBP Dr. Cash in bank
Cr. Accounts receivable 100000 GBP Dr. Loss on FX
Cr. Gain on FX 113600000 GBP

Ericson (US) purchases from Radia (India) Stark (US) purchases from Lan
Pay on Sep 1 1000000 INR Pay on Sep 1
Dec-01 0.1 USD = 1 INR Dec-01
Dec-31 0.105 105000 Dec-31
Sep-22 0.12 Sep-22

Ericson Stark
1-Dec 1-Dec
Dr. Inventory 100000 USD Dr. Inventory
Cr. Accounts payable 100000 USD
 31-Dec 31-Dec
Dr. Loss on FX 5000 USD Dr. Accounts payable
Cr. Accounts payable 5000 USD

1-Mar 1-Mar
Dr. Accounts payable 105000 USD Dr. Accounts payable
Dr. Loss on FX 15000 USD Dr. Loss on FX
Cr. Cash in bank 120000 USD

SM (Korea) sells to DW (France) Chanel (British) purchases fro

Pay on Sep 1 70000 KRW Pay on Sep 1
Dec-01 0.00072 EUR = 1 KRW 50.4 Dec-01
Dec-31 0.0007 72000 Dec-31
Sep-22 0.00068 Sep-22

SM Chanel
1-Dec 1-Dec
Dr. Accounts receivable 70000 USD Dr. Inventory
Cr. Revenue 70000 USD

31-Dec 31-Dec
Dr. Accounts receivable 2000 USD Dr. Accounts payable
Cr. Gain on FX 2000 USD

1-Mar 1-Mar
Dr. Cash in bank 74117.6470588 USD Dr. Accounts payable
Cr. Gain on FX 2117.64705882 Dr. Loss on FX
Cr. Accounts receivable 72000 USD
ABC (German) purchases from EFG (Slovakian) ABC (Italy) sells to EFG (India)
Pay on Sep 1 195900 SKK Pay on Sep 1
Dec-01 15.4 SKK = 1 DEM DEM Dec-01
Dec-31 15.25 12845.90164 Dec-31
Sep-22 15.1 Sep-22

ABC ABC
1-Dec 1-Dec
Dr. Inventory 12720.7792208 DEM Dr. Accounts receivable
Cr. Accounts payable 12720.7792208 DEM

31-Dec 31-Dec
Dr. Loss on FX 125.122418565 DEM Dr. Loss on FX
Cr. Accounts payable 125.122418565 DEM

1-Mar 1-Mar
Dr. Accounts payable 12845.9016393 DEM Dr. Cash in bank
Dr. Loss on FX 127.608294431 DEM Dr. Loss on FX
Cr. Cash in bank 12973.5099338 DEM

Tackett (US) sells to Mania (Mexico) Haru (Korea) purchases from

Pay on Sep 1 800000 Peso Pay on Sep 1
Dec-01 10 peso = 1 USD USD Dec-01
 Dec-31 9.8 81632.65306 Dec-31
Sep-22 10.1 Sep-22

Tackett Haru
1-Dec 1-Dec
Dr. Accounts receivable 80000 USD Dr. Inventory
Cr. Sales revenue 80000 USD

31-Dec 31-Dec
Dr. Accounts receivable 1632.65306122 USD Dr. Loss on FX
Cr. Gain on FX 1632.65306122 USD

1-Mar 1-Mar
Dr. Cash in bank 79207.9207921 USD Dr. Accounts payable
Dr. Loss on FX 2424.73226915 USD Dr. Loss on FX
Cr. Accounts receivable 81632.6530612 USD

David (US) sells to Ly (China) David (US) sells to Ly (China)

Pay on Sep 1 937000 CNY Pay on Sep 1
Dec-01 6.96 CNY = 1 USD USD Dec-01
Dec-31 7 133857.1429 Dec-31
Sep-22 7.2 Sep-22

David David
1-Dec 1-Dec
Dr. Accounts receivable 134626.436782 USD Dr. Accounts receivable
Cr. Sales revenue 134626.436782 USD
 31-Dec 31-Dec
Dr. Loss on FX 769.293924466 USD Dr. Accounts receivable
Cr. Accounts receivable 769.293924466 USD

1-Mar 1-Mar
Dr. Cash in bank 130138.888889 USD Dr. Cash in bank
Dr. Loss on FX 3718.25396825 USD
Cr. Accounts receivable 133857.142857 USD

Ly (China) purchases from David (US) Ly (China) purchases from Da

Pay on Sep 1 937000 CNY Pay on Sep 1
Dec-01 6.96 CNY = 1 USD 134626.4 CNY Dec-01
Dec-31 7 942385.0575 Dec-31
Sep-22 7.2 Sep-22

Ly Ly
1-Dec 1-Dec
Dr. Inventory 937000 CNY Dr. Inventory
Cr. Accounts payable 937000 CNY

31-Dec 31-Dec
Dr. Loss on FX 5385.05747126 CNY Dr. Accounts receivable
Cr. Accounts receivable 5385.05747126 CNY

1-Mar 1-Mar
Dr. Cash in bank 942385.057471 CNY Dr. Cash in bank
Dr. Loss on FX 26925.2873563 CNY
Cr. Cash in bank 969310.344828 CNY
heal in US purchases goods from Singapore 15/11 year 1
200000 SGD
e ( USD per SGD) 0.75 usd = 1 sgd
0.75 160000
0.8
0.82

150000 USD
Cr. Accounts payable 150000

10000
Cr. Accounts payable 10000

Accounts payable 160000

4000
Cr. Cash 164000

company sell products to UK 100000 $ 81300.81301 GBP

ke journal entry for US company

hange rate ( Pound / usd)

1 pound = 1.23 USD 1.23
 1 pound = 1.24 USD 1.24 100813.0081
1 pound = 1.25 USD 1.25

Accounts receivable 100000 USD

Cr. Revenues 100000 USD

Accounts receivable 813.00813 USD

Cr. Gain on FX 813.0081301 USD

101626.016 USD
Cr. Accounts receivable 100813.0081 USD
Cr. Gain on FX 813.0081301 USD

fer (U.S) sells to Canadian company

USD/CAD 100000 USD
tember 1,2019 1.39 1 USD = 1.39 CAD 139000 CAD
tember 15,2019 1.4 99285.71429
ober 15,2019 1.38

fer company

Accounts receivable 100000 USD

Cr. Revenue 100000 USD
 714.285714 USD
Cr. Accounts receivable 714.2857143 USD

100724.638 USD

Cr. Accounts receivable 99285.71429 USD

Cr. Gain on FX 1438.923395

ica (UK) sells to Eximco (US)

20000 USD
Case 1
$1,3 per £ 1.3
$1,32 per £ 1.32 15151.51515
$1,35 per £ 1.35

Accounts receivable 15384.6154 GBP

Cr. Revenue 15384.61538 GBP

233.100233
Cr. Accounts receivable 233.1002331

Cash in bank 14814.8148

336.700337
Cr. Accounts receivable 15151.51515
ica (UK) sells to Eximco (US)
20000 USD
Case 3
$1,3 per £ 1.3
$1,32 per £ 1.32 15151.51515
$1,28 per £ 1.28

Accounts receivable 15384.6154 GBP

Cr. Revenue 15384.61538 GBP

233.100233
Cr. Accounts receivable 233.1002331

Cash in bank 15625

Cr. Accounts receivable 15151.51515
Cr. Gain on FX 473.4848485

ica (UK) purchases from Eximco (US)

20000 USD
Case 2 1.3 usd = 1 gbp
$1,3 per £ 1.3
$1,28 per £ 1.28 15625
 $1,25 per £ 1.25

15384.6154 GBP
Cr. Accounts payable 15384.61538 GBP

240.384615
Cr. Accounts payable 240.3846154

Accounts payable 15625

375
Cr. Cash in bank 16000

fer (US) sells to UK company

20000 USD
GBP/USD 1GBP = 1.23 USD 16260.1626 GBP
1.23
1.24 20162.60163
1.25

Accounts receivable 20000 USD

Cr. Revenue 20000 USD

Accounts receivable 162.601626

Cr. Gain on FX 162.601626
Cash in bank 20325.2033
Cr. Accounts receivable 20162.60163
Cr. Gain on FX 162.601626

Company (VN) purchases from JP company

50000 JPY
VND/JPY 1 JPY = 212.54 VND
tober 1,2019 212.54
tober 30,2019 210.67

10627000 VND
Cr. Accounts payable 10627000 VND

Accounts payable 10627000

Cr. Cash in bank 10533500
Cr. Gain on FX 93500
(UK) sells to Jone (US)
70000 USD
GBP/USD 1GBP = 1.24 USD 56451.6129 GBP
1.24
1.26 55555.55556
1.3

Accounts receivable 56451.6129 USD

Cr. Revenue 56451.6129 USD

896.057348
Cr. Accounts receivable 896.0573477

Cash in bank 53846.1538

1709.40171
Cr. Accounts receivable 55555.55556

(UK) purchases from Jone (US)

70000 USD
GBP/USD 1GBP = 1.24 USD 56451.6129 GBP
1.24
1.26 71129.03226
1.3

Accounts receivable 70000 USD

 Cr. Revenue 70000 USD

Accounts receivable 1129.03226

Cr. Gain on FX 1129.032258

Cash in bank 73387.0968

Cr. Gain on FX 2258.064516
Cr. Accounts payable 71129.03226

USD depreciates against GBP (same GBP = more USD)

1GBP = 1.24USD UK sellers have loss on FX. US sellers have gain on FX.
1GBP = 1.26USD UK buyers have gain on FX. US buyers have loss on FX.

Case 3 USD appreciates against GBP (same GBP = less USD)

$1,32 per £ UK sellers have gain on FX. US sellers have loss on FX.
$1,28 per £ UK buyers have loss on FX. US buyers have gain on FX.
mco (UK) sells to Rose (US)
71076 USD
1.28 1 GBP = 1.28 USD
1.29 55097.67442
1.3

Accounts receivable 55528.125 GBP

Cr. Revenue 55528.125 GBP

430.450581 GBP
Cr. Accounts receivable 430.4505814 GBP

Cash in bank 54673.8462 GBP

423.828265 GBP
Cr. Gain on FX 55097.67442 GBP

er (Kuwaiti) sells to Safar (Jordan)

250000 JD
3.4 KD = 1 JD
 3.8 950000
3.75

Accounts receivable 850000 KD

Cr. Revenue 850000 KD

Accounts receivable 100000 KD

Cr. Gain on FX 100000 KD

Cash in bank 937500 KD

12500 KD
Cr. Gain on FX 950000 KD

rk (US) purchases from Lannister (Switzerland)

50000 CHF
0.94 1 USD = 0.94 CHF
0.96 48000
0.92

53191.4894 USD
Cr. Accounts payable 53191.48936 USD
Accounts payable 5191.48936 USD
Cr. Gain on FX 5191.489362 USD

Accounts payable 48000 USD

6347.82609 USD
Cr. Cash in bank 54347.82609 USD

nel (British) purchases from Mara (Thailand)

98000 GBP
42.38 THB = 1 GBP 4153240
42.4 97953.77358
42.15

98000 GBP
Cr. Accounts payable 98000 GBP

Accounts payable 46.2264151 GBP

Cr. Gain on FX 46.22641509 GBP

Accounts payable 97953.7736 GBP

580.983236 GBP
Cr. Cash in bank 98534.75682 GBP
C (Italy) sells to EFG (India)
448000 EUR
86.94 INR = 1 EUR 38949120 INR EUR
87 447691.0345
87.4

Accounts receivable 448000 EUR

Cr. Revenue 448000 EUR

308.965517 EUR
Cr. Accounts receivable 308.9655172 EUR

Cash in bank 445642.105 EUR

2048.92922 EUR
Cr. Accounts receivable 447691.0345 EUR

u (Korea) purchases from Wednesday (Mexico)

800000 MXN
0.015 MXN = 1 KRW KRW
 0.013 61538461.54
0.01

53333333.3 KRW
Cr. Accounts payable 53333333.33 KRW

8205128.21 KRW
Cr. Accounts payable 8205128.205 KRW

Accounts payable 61538461.5 KRW

18461538.5 KRW
Cr. Cash in bank 80000000 KRW

id (US) sells to Ly (China)

937000 CNY
6.96 CNY = 1 USD USD
6.94 135014.4092
6.9

Accounts receivable 134626.437 USD

Cr. Sales revenue 134626.4368 USD
Accounts receivable 387.97244 USD
Cr. Gain on FX 387.9724403 USD

Cash in bank 135797.101 USD

Cr. Gain on FX 782.6922274 USD
Cr. Accounts receivable 135014.4092 USD

China) purchases from David (US)

937000 CNY
6.96 CNY = 1 USD 134626.437 CNY
6.94 934307.4713
6.9

937000 CNY
Cr. Accounts payable 937000 CNY

Accounts receivable -2692.5287 CNY

Cr. Gain on FX -2692.52874 CNY

Cash in bank 135797.101 CNY

Cr. Gain on FX -798510.37 CNY
Cr. Accounts receivable 934307.4713 CNY