Amount in thousands | ||
a) Postive Translation Adjustment | $ 77 | |
b) Remeasurement Loss | $ 19 |
a.Compute translation adjustment | Amount in 000 | ||
Local Currency NGN | Exchange Rate US $ | Amount in $ | |
Net asset balance 1/1(total assets - notes payable | 30,060. | 0.0066 | 198.396 |
Increases in net assets (income) | |||
Sold inventory at a profit 5/1 (NGN 16,200 - 10,200) | 6,000. | 0.007 | 42 |
Sold land at a gain 6/1 (NGN (6020 -$4020) | 2,000. | 0.0072 | 14.4 |
Decreases in net assets | |||
Paid a dividend 12/1 | -3020 | 0.0084 | -25.368 |
Depreciation recorded | -2010 | 0.0078 | -15.678 |
Net asset balance 12/31 | 33030 | 213.75 | |
Net asset balance 12/31 at current exchange rate | 33030 | 0.0088 | -290.664 |
Translation adjustment - positive | -76.914 | ||
Translation adjustment has impact on net assets due Changes in functional currency. | -76.914 | ||
Translation adjustment —positive | -76.914 | ||
b. Compute remeasurement gain/loss | |||
Local Currency KM | Exchange Rate US $ | Amount in $ | |
Beginning net monetary liability position (purchase of land on account) | -1020 | 0.0066 | -6.732 |
Increases in monetary assets: | |||
Sold inventory 5/1 | 16200 | 0.007 | 113.4 |
Sold land 6/1 | 6020 | 0.007 | 42.14 |
Decreases in monetary assets: | |||
Bought inventory 10/1 | -20020 | 0.008 | -160.16 |
Bought land 11/1 | -3020 | 0.0082 | -24.764 |
Paid a dividend 12/1 | -3020 | 0.0084 | -25.368 |
Ending net monetary liability position | -4860 | 61.484 | |
Ending net monetary liability position at current exchange rate | -4860 | 0.0088 | 42.768 |
Remeasurement Loss | 18.716 | ||
Remeasurement Gain/loss has impact on net monetary assets and liabilities due Changes in functional currency. | 18.716 | ||
Payment on the note payable and collection of accounts receivable do not affect the net monetary liability position | |||
The purchase of land on account did not result in a decrease in monetary assets, rather an increase in monetary liabilities. |
Rolfe Company (a U.S.-based company has a subsidiary in Nigeria where the local currency unit is...
Rolfe Company (a US-based company has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31 2016, the subsidiary had the following balance sheet (amounts are in thousands (000's)) Cash Inventory Land Building Accumulated depreciation Notes payable Common stock Retained earnings NGN 20,040 20,040 10,020 NGN 15,780 10,200 4.020 40,200 (29.100 NGN 52.100 The subsidiary acquired the inventory on August 1, 2016, and the land and building in 2010. It issued the common stock...
Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria
where the local currency unit is the naira (NGN). On December 31,
2016, the subsidiary had the following balance sheet (amounts are
in thousands (000's)):
The subsidiary acquired the inventory on August 1, 2016, and the
land and building in 2010. It issued the common stock in 2008.
During 2017, the following transactions took place:
a. Assuming the NGN is the subsidiary's functional currency,
what is the translation adjustment determined...
Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands (000's)): Cash NGN 16,790 Notes payable NGN 20,380 Inventory 11,900 Common stock 22,300 Land 4,190 Retained earnings 11,150 Building 41,900 Accumulated depreciation (20,950 ) NGN 53,830 NGN 53,830 The subsidiary acquired the inventory on August 1, 2016, and the land and building in 2010. It issued...
Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands (000's)): Cash NGN 15,890 Notes payable NGN 20,020 Inventory 10,100 Common stock 20,020 Land 4,010 Retained earnings 10,010 Building 40,100 Accumulated depreciation (20,050 ) NGN 50,050 NGN 50,050 The subsidiary acquired the inventory on August 1, 2016, and the land and building in 2010. It issued...
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Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands (000's) Cash Inventory Land Building Accumulated depreciation NGN 20,200 21,200 10,600 Notes payable NGN 16,400 11,000 4,100 41,000 Common stock Retained earnings (20,500) NGN 52,000 NGN 52,000 The subsidiary acquired the inventory on August 1, 2016, and the land and building in 2010. It issued the...
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Please help me solve the translation adjustment.
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