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The currency rate Gordon should use to convert its income statements to U.S dollars at year end: Average Rate i.e. 1.60. Hence 1.60 is correct answer.
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Selection of appropriate exchange rate for translation Gordon Ltd., a 100% owned British subsidiary of a...
Required information Westmore Ltd. is a British subsidiary of a U.S. company. Westmore's functional currency is...
Required information Westmore Ltd. is a British subsidiary of a U.S. company. Westmore's functional currency is the pound sterling (E). The following exchange rates were in effect during 2018: Jan.1 June 30 Dec. 31 Weighted average rate for the year £1 = $ 1.60 £1 = $1.64 £1 = $1.61 £1 = $ 1.59 Westmore reported sales of £1,500,000 during 2018. What amount (rounded) would have been included for this subsidiary in calculating consolidated sales? Multiple Choice 0 0 0...
Required information Westmore Ltd. is a British subsidiary of a U.S. company. Westmore's functional currency is...
Required information Westmore Ltd. is a British subsidiary of a U.S. company. Westmore's functional currency is the pound sterling (£). The following exchange rates were in effect during 2018: Jan.1 June 20 Dec.31 Weighted average rate for the year Ε1 - $1.60 Ε1 - $.64 Ε1 = $ 1.61 £1 = $ 1.59 On December 31, 2018, Westmore had accounts receivable of £280,000. What amount (rounded) would have been included for this subsidiary in calculating consolidated accounts receivable? Η Ο...
31. The appropriate exchange rate for translating a plant asset in the balance sheet of a...
31. The appropriate exchange rate for translating a plant asset in the balance sheet of a foreign subsidiary in which the functional currency is the U.S. dollar is the A) forward rate. B) current exchange rate. C) average exchange rate for the current year. D) historical exchange rate in effect when the plant asset was acquired or the date of acquisition, whichever is later. 32. A foreign subsidiary's functional currency is its local currency which has not experienced significant inflation....
1. Exchange Rate: Suppose the direct foreign exchange rates in U.S. dollars are: 1 British pound...
1. Exchange Rate: Suppose the direct foreign exchange rates in U.S. dollars are: 1 British pound = $1.60 1 Canadian dollar = $0.74 Required: a. What are the indirect exchange rates for the British pound and the Canadian dollar? b. How many pound must a British company pay to buy goods costing $8,000 from the U.S. company? c. How many U.S. dollars must be paid for a purchase costing 4,000 Canadian dollars? 2. Changes in Exchange Rates: Upon arrival at...
Pole Company sold inventory to South Ltd., an English subsidiary. The goods cost Pole $9,800 and...
Pole Company sold inventory to South Ltd., an English subsidiary. The goods cost Pole $9,800 and were sold to South for $13,200 on November 27, payable in British pounds. The goods are still on hand at the end of the year on December 31. The British pound (£) is the functional currency of the English subsidiary. The exchange rates follow: November 27 December 31 € 1 = 1.60 1=1.70 Required: a. At what dollar amount is the ending inventory shown...
In evaluating the performance of a manager of a foreign subsidiary, what issues are associated with...
In evaluating the performance of a manager of a foreign subsidiary, what issues are associated with the calculation of profit? All answers are correct. Whether to adjust profit for items included in profit over which the manager has no control. Whether to measure profit in local currency or in parent company currency. If profit is measured in parent company currency, the method of foreign currency translation to be used. How can a local currency operating budget and actual results be...
Translation of financial statements and consolidation of a foreign subsidiary (no amortization of...
Translation of financial statements and consolidation of a
foreign subsidiary (no amortization of AAP) Assume that your
company owns a subsidiary operating in Great Britain. The
subsidiary maintains its books in the British pound (GBP) as its
functional currency. Following are the subsidiary’s financial
statements (in GBP) for the most recent year:
(in GBP) (in GBP) (in GBP) Statement of Cash Flows: Net Income Change in accounts Income Statement: Balance Sheet: Sales 2,730,000 Assets 382,200 (1,638,000) Cash 776,958 (105,560) (135,590)...
Solo Co. Ltd. located in Mexico City is a wholly owned subsidiary of Partner Inc., a U.S. company. At the beginning of t...
Solo Co. Ltd. located in Mexico City is a wholly owned subsidiary of Partner Inc., a U.S. company. At the beginning of the year, Solo’s condensed balance sheet was reported in Mexican pesos (MXP) as follows: Assets 3,490,000 Liabilities 2,900,000 Stockholders’ Equity 590,000 During the year, the company earned income of MXP270,000 and on November 1 declared dividends of MXP125,000. The Mexican peso is the functional currency. Relevant exchange rates between the peso and the U.S. dollar follow: January 1...
Grant, Inc., is a well-known U.S. firm that needs to borrow 10 million British pounds to support a new business in the U...
Grant, Inc., is a well-known U.S. firm that needs to borrow 10 million British pounds to support a new business in the United Kingdom. However, it cannot obtain financing from British banks because it is not yet established within the United Kingdom. It decides to issue dollar-denominated debt (at par value) in the U.S., for which it will pay an annual coupon rate of 10%. It then will convert the dollar proceeds from the debt issue into British pounds at...
Kingscraft Inc., a company with headquarters in London, England, is a fully owned subsidiary of Dover...
Kingscraft Inc., a company with headquarters in London, England, is a fully owned subsidiary of Dover Company. The accountant for Dover just received Kingscraft’s financial statements and must translate them from British pounds into U.S. dollars to prepare consolidated financial statements. Income statement and balance sheet data for the year just ended, along with relevant exchange rates, are as follows: (in pounds) Revenues £445,000 Cost of goods sold 260,000 Gross margin £185,000 Other expenses 80,000 Net income £105,000 Cash £...
Required information Westmore Ltd. is a British subsidiary of a U.S. company. Westmore's functional currency is the pound sterling (E). The following exchange rates were in effect during 2018: Jan.1 June 30 Dec. 31 Weighted average rate for the year £1 = $ 1.60 £1 = $1.64 £1 = $1.61 £1 = $ 1.59 Westmore reported sales of £1,500,000 during 2018. What amount (rounded) would have been included for this subsidiary in calculating consolidated sales? Multiple Choice 0 0 0...
Required information Westmore Ltd. is a British subsidiary of a U.S. company. Westmore's functional currency is the pound sterling (£). The following exchange rates were in effect during 2018: Jan.1 June 20 Dec.31 Weighted average rate for the year Ε1 - $1.60 Ε1 - $.64 Ε1 = $ 1.61 £1 = $ 1.59 On December 31, 2018, Westmore had accounts receivable of £280,000. What amount (rounded) would have been included for this subsidiary in calculating consolidated accounts receivable? Η Ο...
31. The appropriate exchange rate for translating a plant asset in the balance sheet of a foreign subsidiary in which the functional currency is the U.S. dollar is the A) forward rate. B) current exchange rate. C) average exchange rate for the current year. D) historical exchange rate in effect when the plant asset was acquired or the date of acquisition, whichever is later. 32. A foreign subsidiary's functional currency is its local currency which has not experienced significant inflation....
Pole Company sold inventory to South Ltd., an English subsidiary. The goods cost Pole $9,800 and were sold to South for $13,200 on November 27, payable in British pounds. The goods are still on hand at the end of the year on December 31. The British pound (£) is the functional currency of the English subsidiary. The exchange rates follow: November 27 December 31 € 1 = 1.60 1=1.70 Required: a. At what dollar amount is the ending inventory shown...
Translation of financial statements and consolidation of a
foreign subsidiary (no amortization of AAP) Assume that your
company owns a subsidiary operating in Great Britain. The
subsidiary maintains its books in the British pound (GBP) as its
functional currency. Following are the subsidiary’s financial
statements (in GBP) for the most recent year:
(in GBP) (in GBP) (in GBP) Statement of Cash Flows: Net Income Change in accounts Income Statement: Balance Sheet: Sales 2,730,000 Assets 382,200 (1,638,000) Cash 776,958 (105,560) (135,590)...
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