Charleston Corporation operates a branch operation in a foreign country. Although this branch operates in euros, the U.S. dollar is its functional currency. Thus, a remeasurement is necessary to produce financial information for external reporting purposes. The branch began the year with 500,000 euros in cash and no other assets or liabilities. However, the branch immediately used 300,000 euros to acquire a warehouse. On May 1, it purchased inventory costing 100,000 euros for cash that it sold on July 1 for 160,000 euros cash. The branch transferred 10,000 euros to the parent on October 1 and recorded depreciation on the warehouse of 10,000 euros for the year. U.S dollar exchange rates for 1 euro follow: January 1 May 1 $ 1.141 euro 1.18 = 1 euro
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- Charleston Corporation operates a branch operation in a foreign country. Although this branch operates in euros, the U.S. dollar is its functional currency. Thus, a remeasurement is necessary to produce financial information for external reporting purposes. The branch began the year with 500,000 euros in cash and no other assets or liabilities. However, the branch immediately used 300,000 euros to acquire a warehouse. On May 1, it purchased inventory costing 100,000 euros for cash that it sold on July 1 for 160,000 euros cash. The branch transferred 10,000 euros to the parent on October 1 and recorded depreciation on the warehouse of 10,000 euros for the year. Currency exchange rates for 1 euro follow: January 1 . . . . . . . . . . $1.14 = 1 euroMay 1 . . . . . . . . . . . . . 1.18 = 1July 1 . . . . . . . . . . .. . . 1.20 = 1October 1 . . . . . . . . . . 1.18 = 1December 31 . . . . . . . 1.08 = 1Average for the year. . 1.16 = 1 What is the remeasurement gain or loss to be recognized…Charleston Corporation operates a branch operation in a foreign country. Although this branch operates in euros, the U.S. dollar is its functional currency. Thus, a remeasurement is necessary to produce financial information for external reporting purposes. The branch began the year with 500,000 euros in cash and no other assets or liabilities. However, the branch immediately used 300,000 euros to acquire a warehouse. On May 1, it purchased inventory costing 100,000 euros for cash that it sold on July 1 for 160,000 euros cash. The branch transferred 10,000 euros to the parent on October 1 and recorded depreciation on the warehouse of 10,000 euros for the year. Currency exchange rates for 1 euro follow:What is the remeasurement gain or loss to be recognized in the consolidated income statement?a. $100 gain.b. $200 gain.c. $100 loss.d. $200 loss.Charleston Corporation operates a branch operation in a foreign country. Although this branch operates in euros, the U.S. dollar is its functional currency. Thus, a remeasurement is necessary to produce financial information for external reporting purposes. The branch began the year with 489,000 euros in cash and no other assets or liabilities. However, the branch immediately used 323,000 euros to acquire a warehouse. On May 1, it purchased inventory costing 105,000 euros for cash that it sold on July 1 for 161,000 euros cash. The branch transferred 29,000 euros to the parent on October 1 and recorded depreciation on the warehouse of 17,000 euros for the year. Currency exchange rates for 1 euro follow: January 1 $1.59 = 1 euro May 1 1.63 = 1 July 1 1.65 = 1 October 1 1.63 = 1 December 31 1.53 = 1 Average for the year 1.61 = 1 What is the remeasurement gain or loss to be recognized in the consolidated income statement?
- Lancer, Inc. (a U.S.-based company) establishes a subsidiary in a foreign country on January 1, 2016. The following account balances for the year ending December 31, 2017, are stated in kanquo (KQ), the local currency: Sales KQ 250,000 Inventory (bought on 3/1/17) 150,000 Equipment (bought on 1/1/16) 70,000 Rent expense 16,000 Dividends (declared on 10/1/17) 24,000 Notes receivable (to be collected in 2020) 41,000 Accumulated depreciation—equipment 21,000 Salary payable 6,000 Depreciation expense 7,000 The following U.S.$ per KQ exchange rates are applicable: January 1, 2016 $0.24 Average for 2016 0.25 January 1, 2017 0.29 March 1, 2017 0.30 October 1, 2017 0.32 December 31, 2017 0.33 Average for 2017 0.31 Lancer is preparing account balances to produce consolidated financial statements. Assuming that the kanquo is the functional currency, what exchange rate would be used to report each of these…Amazing Corporation recorded £1,000,000(pound) in Accounts Receivables for sales to a customer in the U.K. If the company recorded a foreign currency exchange gain on its receivables, it means that the Pound was ___________________ (one word - depreciated or appreciatedABC Corp. imported a machine from the US for $50,000 on October 10, 20x1. A letter of credit was opened with a local bank based on the commercial invoice for $50,000, on which ABC Corp. made a 100% deposit cover based on the exchange rate of $1 to P27.50. Shipment of the machine was effected on December 3, 20x1, at which time the exporter collected the proceeds of the letter of credit when the prevailing exchange rate was $1 to P28.00. From the exchange rate fluctuation, ABC Corp. realized how much gain or loss or no gain, no loss? AU Co. acquired a fixed asset for $36,000 on November 1, 20x1 when the exchange rate was $1 = P23.00. At December 31, 20x1, the entity's year-end, the supplier of the fixed asset has not been paid and the exchange rate at that time was $1 = P25.00. On the December 31, 20x1 statement of financial position, what will be the values for the fixed asset and the creditor who was unpaid? On January 1, 20x6, the Riza Co. purchased equipment for P300,000. The…
- A company located in the USA, which has the dollar as its functional currency, purchased inventory on February 1 in Vietnam for 10,000,000 dongs with a payment date of April 1. One dong can be exchanged for $0.01 on February 1, and one dong can be exchanged for $0.12 on April 1. On April 1, the company pays off the 10,000,000-dong debt from the purchase of inventory. When the US company presents its financial statements, which of the following statements is false? The business should file with the statement a gross profit of $110,000. No profit is recognized related to inventory A loss of $20,000 is reported as a result of accounts payable Cost of goods sold is reported at $120,000Lancer, Inc. (a U.S.-based company), establishes a subsidiary in Croatia on January 1, 2019. The following account balances for the year ending December 31, 2020, are stated in kuna (K), the local currency: Sales K 210,000 Inventory (bought on 3/1/20) 105,000 Equipment (bought on 1/1/19) 62,000 Rent expense 14,000 Dividends (declared on 10/1/20) 22,000 Notes receivable (to be collected in 2023) 37,000 Accumulated depreciation—equipment 18,600 Salary payable 5,200 Depreciation expense 6,200 The following U.S.$ per kuna exchange rates are applicable: January 1, 2019 $0.20 Average for 2019 0.21 January 1, 2020 0.25 March 1, 2020 0.26 October 1, 2020 0.28 December 31, 2020 0.29 Average for 2020 0.27 Lancer is preparing account balances to produce consolidated financial statements. Assuming that the kuna is the functional currency, what exchange rate would be used to report each of these accounts in…The Department of Foreign Affairs (DFA) collected P10,000,000 revenue from passport and visa applications for March 20X2. The said amount was then deposited in an authorized servicing bank. Moreover, in the same month, the DFA received a P5,000,000 cash disbursement ceiling (CDC) and paid its rental of P600,000.Required: Give the necessary entries to be made by DFA from the above scenario.
- Blakely Industries has the following items: Currency $26,250 Customer checks that have not been deposited 700 U.S. government bonds that originally maturing in 3 months 13,000 U.S. government bonds that originally maturing in 12 months 14,000 Cash in saving and checking accounts 64,000 Certificates of deposits that originally maturing in 18 months 47,000 Required: How much should Blakely report as cash and equivalents on its balance sheet?Choose the correct.Matthias Corp. had the following foreign currency transactions during 2017:∙ Purchased merchandise from a foreign supplier on January 20 for the U.S. dollar equivalent of $60,000 and paid the invoice on April 20 at the U.S. dollar equivalent of $50,000.∙ On September 1, borrowed the U.S. dollar equivalent of $300,000 evidenced by a note that is payable in the lender’s local currency in one year. On December 31, the U.S. dollar equivalent of the principal amount was $320,000.In Matthias’s 2017 income statement, what amount should be included as a net foreign exchange gain or loss?a. $10,000 gainb. $10,000 lossc. $20,000 gaind. $30,000 lossWinston Corp., a U.S. company, had the following foreign currency transactions during 2021: ( 1.) Purchased merchandise from a foreign supplier on July 16, 2021 for the U.S. dollar equivalent of $47,000 and paid the invoice on August 3, 2021 at the U.S. dollar equivalent of $54,000. (2.) On October 15, 2021 borrowed the U.S. dollar equivalent of $315,000 evidenced by a non-interest-bearing note payable in euros on October 15, 2022. The U.S. dollar equivalent of the note amount was $295,000 on December 31, 2021, and $299,000 on October 15, 2022. What amount should be included as a foreign exchange gain or loss from the two transactions for 2022?