Question

Translate into dollars the balance sheet ofWyomingWyomingLeather? Goods'GermanGermansubsidiary. WhenWyomingWyoming Leather Goods acquired the foreign? subsidiary, a euro was worth ?$1.06 The current exchange rate is ?$1.340. During the period when retained earnings were? earned, the average exchange rate was ?$1.17 per euro.

1. During the period covered by this? scenario, which currency was? stronger, the dollar or the? euro?

Begin by translating the balance sheet of WyomingWyoming Leather? Goods' GermanGerman subsidiary into U.S. dollars.

German Subsidiary:
		Exchange
	Euros	Rate	Dollars
Assets	800,000
Liabilities	200,000
Stockholders' equity:
Common stock	85,000
Retained earnings	515,000
Foreign-currency
translation adjustment
	800,000		1072000

Answer 1

The complete table would look like the following after converting to $ on the basis of given exchange rate.

	Euros	Exchange Rate	Dollars
Assets	€                           800,000.00	$                          1.34	$               1,072,000.00
Liabilities	€                           200,000.00	$                          1.34	$                   268,000.00
Stockholders' equity:
Common stock	€                             85,000.00	$                          1.34	$                   113,900.00
Retained earnings	€                           515,000.00	$                          1.17	$                   602,550.00
Foreign-currency translation adjustment			$                     87,550.00
TOTAL	€                           800,000.00		$               1,072,000.00