ACCT 405 ADVANCED ACCOUNTING WEEK 6 HOMEWORK SOLUTIONS / 2020
Chapter 7: Problem 25
25. Peerless Corporation (a U.S. company) made a sale to a foreign customer on September 15, for 100,000 crowns. It received payment on October 15. The following exchange rates for 1 crown apply:
September 15
|
$ 0.60
|
September 30
|
$ 0.66
|
October 15
|
$ 0.62
|
Prepare all journal entries for Peerless in connection with this sale, assuming that the company closes its books on September 30 to prepare interim financial statements.
Chapter 8: Problems 4, 5, 8, 9, 18, and 22
4. A foreign subsidiary of Thun Corporation has one asset (inventory) and no liabilities. The functional currency for this subsidiary is the yuan. The inventory was acquired for 100,000 yuan when the exchange rate was $0.16 = 1 yuan. Consolidated statements are to be produced, and the current exchange rate is $0.12 = 1 yuan. Which of the following statements is true for the consolidated financial statements?
5. At what rates should the following balance sheet accounts in foreign statements be translated (using the current rate method) into U.S. dollars?
8. What amount does Newberry’s consolidated balance sheet report for this inventory at December 31, 2017?
9. What amount does Newberry’s consolidated income statement report for cost of goods sold for the year ending December 31, 2018?
18. A foreign subsidiary’s functional currency is its local currency, which has not experienced significant inflation. The current exchange rate at the balance sheet date is the appropriate exchange rate for translating:
22. On January 1, Narnevik Corporation formed a subsidiary in a foreign country. On April 1, the subsidiary purchased inventory on account at a cost of 250,000 local currency units (LCU). One-fifth of this inventory remained unsold on December 31, while 30 percent of the account payable had not yet been paid. The U.S. $ per LCU exchange rates were as follows:
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