U.S. Industries has a subsidiary in Switzerland. The subsidiary’s financial statements are mainta...
U.S. Industries has a subsidiary in Switzerland. The subsidiary’s financial statements are maintained in Swiss francs (CHF). Exchange rates ($/CHF) for selected dates are as follows:
| January 1, 2018 | $1.02 | November 30, 2020 | $1.08 | |
| January 1, 2019 | 1.04 | December 31, 2020 | 1.09 | |
| Average for 2020 | 1.06 |
The following items appear in the subsidiary’s trial balance at December 31, 2020:
1. Cash in bank, CHF4,000,000.
2. Inventory, CHF3,000,000. The inventory was acquired on November 30, 2020.
3. Machinery and equipment, CHF11,000,000. A review of the records indicates that the company bought equipment costing CHF5,000,000 in January 2018 (20 percent of this was sold in January 2020) and additional equipment costing CHF7,000,000 in January 2019. Ignore accumulated depreciation.
4. Depreciation expense on machinery and equipment, CHF1,100,000 (depreciated over ten years, straight-line basis).
Required
Calculate the dollar amount for each of the above items, assuming the functional currency of the Swiss subsidiary is
(a) the U.S. dollar and
(b) the Swiss franc.
Enter answers using all zeros (do not abbreviate to millions or thousands).
| (a) | (b) | ||
|---|---|---|---|
| Cash | $Answer | $Answer | |
| Inventory | $Answer | $Answer | |
| Machinery and equipment | $Answer | $Answer | |
| Depreciation expense | $Answer | $Answer |
Homework Answers
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U.S. Industries has a subsidiary in Switzerland. The subsidiary’s financial statements are mainta...
Translation and Remeasurement of Account Balances U.S. Industries has a subsidiary in Switzerland. The subsidiary’s financial...
Translation and Remeasurement of Account Balances U.S. Industries has a subsidiary in Switzerland. The subsidiary’s financial statements are maintained in Swiss francs (CHF). Exchange rates ($/CHF) for selected dates are as follows: January 1, 2018 $1.02 November 30, 2020 $1.08 January 1, 2019 1.04 December 31, 2020 1.09 Average for 2020 1.06 The following items appear in the subsidiary’s trial balance at December 31, 2020: 1. Cash in bank, CHF4,000,000. 2. Inventory, CHF3,000,000. The inventory was acquired on November 30,...
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On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with...
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On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with...
On January 1, 20X1, Popular Creek Corporation organized SunTime
Company as a subsidiary in Switzerland with an initial investment
cost of Swiss francs (SFr) 75,000. SunTime’s December 31, 20X1,
trial balance in SFr is as follows:
Debit
Credit
Cash
SFr
8,800
Accounts Receivable (net)
23,500
Receivable from Popular Creek
5,300
Inventory
25,500
Plant & Equipment
110,000
Accumulated Depreciation
SFr
11,700
Accounts Payable
13,800
Bonds Payable
51,000
Common Stock
75,000
Sales
153,600
Cost of Goods Sold
71,000
Depreciation Expense
11,700
Operating...
On January 1, 20X1, Popular Creek Corporation organized RoadTime Company as a subsidiary in Switzerland with an init...
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Company as a subsidiary in Switzerland with an initial investment
cost of Swiss francs (SFr) 60,000. RoadTime’s December 31, 20X1,
trial balance in SFr is as follows:
Debit
Credit
Cash
SFr
7,000
Accounts Receivable (net)
20,000
Receivable from Popular Creek
5,000
Inventory
25,000
Plant & Equipment
100,000
Accumulated Depreciation
SFr
10,000
Accounts Payable
12,000
Bonds Payable
50,000
Common Stock
60,000
Sales
150,000
Cost of Goods Sold
70,000
Depreciation Expense
10,000
Operating...
Exercise 13-4 On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland. The acquisition wa...
Exercise 13-4
On January 1, 2014, Trenten Systems, a U.S.-based company,
purchased a controlling interest in Grant Management Consultants
located in Zurich, Switzerland. The acquisition was treated as a
purchase transaction. The 2014 financial statements stated in Swiss
francs are given below.
GRANT MANAGEMENT CONSULTANTS
Comparative Balance Sheets
January 1 and December 31, 2014
Jan. 1
Dec. 31
Cash and Receivables
20,000
54,900
Net Property, Plant, and Equipment
40,700
36,400
Totals
60,700
91,300
Accounts and Notes Payable
30,400
32,200
Common...
Translation of financial statements A U.S.-based MNC has a subsidiary in France (local currency, euro, €)....
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On January 1, 20X1, Popular Creek Corporation organized RoadTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 65.000. RoadTime's December 31, 20x1. trial balance in SFr is as follows Debit SFr 8.300 22,500 5.400 28.000 102,000 Credit Cash Accounts Recelvable (net) Receivable from Popular Creek Inventory Plant & Equipment Accumulated Depreciation Accounts Payable Bonds Payable Common Stock Sales Cost of Goods Sold Depreciation Expense Operating Expense Dividends Paid SFr 10.900 13.900 51.500 65.000...
On January 1, 20X1, Popular Creek Corporation organized RoadTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 62,000. RoadTime's December 31, 20X1, trial balance in SFr is as follows Debit SFr 8,500 22.000 6,900 26,000 109,000 Credit Cash Accounts Receivable (net) Receivable from Popular Creek Inventory Plant & Equipment Accumulated Depreciation Accounts Payable Bonds Payable Common Stock SFr 10,200 12,900 50,500 62,000 169,700 Sales Cost of Goods Sold 72,000 10,200 33,500 17,200 Depreciation...
On January 1, 20X1, Popular Creek Corporation organized SunTime
Company as a subsidiary in Switzerland with an initial investment
cost of Swiss francs (SFr) 75,000. SunTime’s December 31, 20X1,
trial balance in SFr is as follows:
Debit
Credit
Cash
SFr
8,800
Accounts Receivable (net)
23,500
Receivable from Popular Creek
5,300
Inventory
25,500
Plant & Equipment
110,000
Accumulated Depreciation
SFr
11,700
Accounts Payable
13,800
Bonds Payable
51,000
Common Stock
75,000
Sales
153,600
Cost of Goods Sold
71,000
Depreciation Expense
11,700
Operating...
On January 1, 20X1, Popular Creek Corporation organized RoadTime
Company as a subsidiary in Switzerland with an initial investment
cost of Swiss francs (SFr) 60,000. RoadTime’s December 31, 20X1,
trial balance in SFr is as follows:
Debit
Credit
Cash
SFr
7,000
Accounts Receivable (net)
20,000
Receivable from Popular Creek
5,000
Inventory
25,000
Plant & Equipment
100,000
Accumulated Depreciation
SFr
10,000
Accounts Payable
12,000
Bonds Payable
50,000
Common Stock
60,000
Sales
150,000
Cost of Goods Sold
70,000
Depreciation Expense
10,000
Operating...
Exercise 13-4
On January 1, 2014, Trenten Systems, a U.S.-based company,
purchased a controlling interest in Grant Management Consultants
located in Zurich, Switzerland. The acquisition was treated as a
purchase transaction. The 2014 financial statements stated in Swiss
francs are given below.
GRANT MANAGEMENT CONSULTANTS
Comparative Balance Sheets
January 1 and December 31, 2014
Jan. 1
Dec. 31
Cash and Receivables
20,000
54,900
Net Property, Plant, and Equipment
40,700
36,400
Totals
60,700
91,300
Accounts and Notes Payable
30,400
32,200
Common...
Translation of financial statements A U.S.-based MNC has a subsidiary in France (local currency, euro, €). The balance sheet and income statement of the subsidiary follow: : On December 31, 2019, the exchange rate is US$1.17/€. Assume that the local (euro) figures for the statements remain the same on December 31, 2020. Calculate the U.S. dollar-translated figures for the two ending time periods, assuming that between December 31, 2019 and December 31, 2020, the euro has appreciated against the U.S....
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