Question

To avoid confusion, please help by providing the formula too. Thank you!

Sport rate = $2/€1 Historical rate = $3/€1 A company located in Sweden has translated its financial accounts into U.S. dollars. Fill out the missing entries that translate the balance sheet below. Current Rate Temporal Local Currency (€) Monetary / Current Nonmonetar Noncurrenty Balance Sheet Cash 2,100 Marketable Securities 1,000 Inventory (Current Value = £2800) Net Fixed Assets 2,500 4,000 Total Assets 9,600 Current Liabilities 2,200 Long-Term Debt 2,800 Common Stock 3,700 Retained Earnings 900 (700) 1,000 Cumulative Transfer Adjustment (CTA) Total Liability & Equity 9,600 23,200 25,700 19,200

Answer 1

Current / Non Current Method : Current asset and current liabilities are translated at current rate while all other item is translated at historic rate & retained earning were already provided

Monetary / Non Monetary : Cash, Account receivable/payable, long term debt are monetary item which are translated with closing rate while others are translated at historic rate. The retained earning is found as balancing number

Current Rate : All item is translated through current rate. The retained earning number is provided, the CTA amount found as balancing number

Temporal Method : Under temporal method all item is translated through historic rate however in case of inventory current value is considered for translation and not book value. The retained earning is derived through balancing number

Balance Sheet	Local Currency	Current / Non Current	Monetary / Non Monetary	Current Rate	Temporal
Cash	2,100.00	4,200.00	4,200.00	4,200.00	6,300.00
Marketable Securities	1,000.00	2,000.00	2,000.00	2,000.00	3,000.00
Inventory (Current Value 2800)	2,500.00	5,000.00	7,500.00	5,000.00	8,400.00
Net Fixed Asset	4,000.00	12,000.00	12,000.00	8,000.00	12,000.00
Total Assets	9,600.00	23,200.00	25,700.00	19,200.00	29,700.00
Current Liabilities	2,200.00	4,400.00	4,400.00	4,400.00	6,600.00
Long Term Debt	2,800.00	8,400.00	5,600.00	5,600.00	8,400.00
Common Stock	3,700.00	11,100.00	11,100.00	11,100.00	11,100.00
Retained Earning	900.00	(700.00)	4,600.00	1,000.00	3,600.00
Cumulative Transfer Adjustment		-		(2,900.00)
Total Liability & Equity	9,600.00	23,200.00	25,700.00	19,200.00	29,700.00

The file with excel formula as under :

Balance Sheet	Local Currency	Current / Non Current	Monetary / Non Monetary	Current Rate	Temporal
Cash	2100	=B4*2	=B4*2	=B4*2	=B4*3
Marketable Securities	1000	=B5*2	=B5*2	=B5*2	=B5*3
Inventory (Current Value 2800)	2500	=B6*2	=B6*3	=B6*2	=2800*3
Net Fixed Asset	4000	=B7*3	=B7*3	=B7*2	=B7*3
Total Assets	=SUM(B4:B7)	=SUM(C4:C7)	=SUM(D4:D7)	=SUM(E4:E7)	=SUM(F4:F7)
Current Liabilities	2200	=B9*2	=B9*2	=B9*2	=B9*3
Long Term Debt	2800	=B10*3	=B10*2	=B10*2	=B10*3
Common Stock	3700	=B11*3	=B11*3	=B11*3	=B11*3
Retained Earning	900	-700	=D8-SUM(D9:D11)	1000	=F8-SUM(F9:F11)
Cumulative Transfer Adjustment		=C8-SUM(C9:C12)		=E8-SUM(E9:E12)
Total Liability & Equity	=SUM(B9:B13)	=SUM(C9:C13)	=SUM(D9:D13)	=SUM(E9:E13)	=SUM(F9:F13)