Question

In: Accounting

Watson Company has a subsidiary in the country of Alonza where the local currency unit is...

Watson Company has a subsidiary in the country of Alonza where the local currency unit is the kamel (KM). On December 31, 2014, the subsidiary has the following balance sheet:

  
  Cash KM 26,000    Notes payable (due 2016) KM 28,000
  Inventory 23,000    Common stock    35,000
  Land 4,000    Retained earnings    17,500
  Building 55,000   
  Accumulated depreciation (27,500)
KM 80,500    KM 80,500

The subsidiary acquired the inventory on August 1, 2014, and the land and buildings in 2000. It issued the common stock in 1998. During 2015, the following transactions took place:

2015
  Feb. 1   Paid 15,500 KM on the note payable.
  May 1   Sold entire inventory for 31,000 KM on account.
  June 1   Sold land for 4,900 KM cash.
  Aug. 1   Collected all accounts receivable.
  Sept.1   Signed long-term note to receive 10,000 KM cash.
  Oct. 1   Bought inventory for 15,000 KM cash.
  Nov. 1   Bought land for 4,000 KM on account.
  Dec. 1   Declared and paid 3,800 KM cash dividend to parent.
  Dec. 31   Recorded depreciation for the entire year of 2,750 KM.

The exchange rates for 1 KM are as follows:

  
  1998 1 KM = $ 0.24
  2000 1 = 0.21
  August 1, 2014 1 = 0.31
  December 31, 2014 1 = 0.32
  February 1, 2015 1 = 0.33
  May 1, 2015 1 = 0.34
  June 1, 2015 1 = 0.35
  August 1, 2015 1 = 0.37
  September 1, 2015 1 = 0.38
  October 1, 2015 1 = 0.39
  November 1, 2015 1 = 0.40
  December 1, 2015 1 = 0.41
  December 31, 2015 1 = 0.44
  Average for 2015 1 = 0.38
a.

If this is a translation, what is the translation adjustment determined solely for 2015?

b.

If this is a remeasurement, what is the remeasurement gain or loss determined solely for 2015?

Solutions

Expert Solution

ANSWER:


Related Solutions

Watson Company has a subsidiary in the country of Alonza where the local currency unit is...
Watson Company has a subsidiary in the country of Alonza where the local currency unit is the kamel (KM). On December 31, 2014, the subsidiary has the following balance sheet:      Cash KM 3,500    Notes payable (due 2016) KM 22,000   Inventory 15,500    Common stock    25,000   Land 8,000    Retained earnings    12,500   Building 65,000      Accumulated depreciation (32,500) KM 59,500    KM 59,500 The subsidiary acquired the inventory on August 1, 2014, and the land and buildings...
Watson Company has a subsidiary in the country of Alonza where the local currency unit is...
Watson Company has a subsidiary in the country of Alonza where the local currency unit is the kamel (KM). On December 31, 2014, the subsidiary has the following balance sheet:      Cash KM 3,500    Notes payable (due 2016) KM 22,000   Inventory 15,500    Common stock    25,000   Land 8,000    Retained earnings    12,500   Building 65,000      Accumulated depreciation (32,500) KM 59,500    KM 59,500 The subsidiary acquired the inventory on August 1, 2014, and the land and buildings...
Watson Company has a subsidiary in the country of Alonza where the local currency unit is...
Watson Company has a subsidiary in the country of Alonza where the local currency unit is the kamel (KM). On December 31, 2014, the subsidiary has the following balance sheet:      Cash KM 15,000    Notes payable (due 2016) KM 28,500   Inventory 23,500    Common stock    30,000   Land 5,000    Retained earnings    15,000   Building 60,000      Accumulated depreciation (30,000) KM 73,500    KM 73,500 The subsidiary acquired the inventory on August 1, 2014, and the land and buildings...
Watson Company has a subsidiary in the country of Alonza where the local currency unit is...
Watson Company has a subsidiary in the country of Alonza where the local currency unit is the kamel (KM). On December 31, 2014, the subsidiary has the following balance sheet:      Cash KM 15,000    Notes payable (due 2016) KM 28,500   Inventory 23,500    Common stock    30,000   Land 5,000    Retained earnings    15,000   Building 60,000      Accumulated depreciation (30,000) KM 73,500    KM 73,500 The subsidiary acquired the inventory on August 1, 2014, and the land and buildings...
1. Watson Company has a subsidiary in the country of Alonza where the local currency unit...
1. Watson Company has a subsidiary in the country of Alonza where the local currency unit is the kamel (KM). On December 31, 2014, the subsidiary has the following balance sheet:      Cash KM 13,500    Notes payable (due 2016) KM 30,000   Inventory 25,000    Common stock    26,000   Land 8,000    Retained earnings    13,000   Building 45,000      Accumulated depreciation (22,500) KM 69,000    KM 69,000 The subsidiary acquired the inventory on August 1, 2014, and the land and...
Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is...
Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]): Cash NGN 16,780 Notes payable NGN 20,360 Inventory 11,800 Common stock 22,200 Land 4,180 Retained earnings 11,100 Building 41,800 Accumulated depreciation (20,900 ) NGN 53,660 NGN 53,660 The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued...
Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is...
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 16,400 Notes payable NGN 20,200 Inventory 11,000 Common stock 21,200 Land 4,100 Retained earnings 10,600 Building 41,000 Accumulated depreciation (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...
Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is...
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 15,780 Notes payable NGN 20,040 Inventory 10,200 Common stock 20,040 Land 4,020 Retained earnings 10,020 Building 40,200 Accumulated depreciation (20,100 ) NGN 50,100 NGN 50,100 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...
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 16,400 Notes payable NGN 20,200 Inventory 11,000 Common stock 21,200 Land 4,100 Retained earnings 10,600 Building 41,000 Accumulated depreciation (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...
Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is...
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 16,840 Notes payable NGN 20,480 Inventory 12,400 Common stock 22,800 Land 4,240 Retained earnings 11,400 Building 42,400 Accumulated depreciation (21,200 ) NGN 54,680 NGN 54,680 The subsidiary acquired the inventory on August 1, 2016, and the land and building in 2010. It issued...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT