Schweser Exam 1 AM Translation Vignette
I’ve dissected this vignette but have a few outstanding Q:
1. Inventory: Although the translated amount is given, I see that they used the average rate of 1.35 to obtain it. Since the firm uses FIFO, shouldn’t you use the most current rate of 1.32? Or does the “purchased inventory evenly throughout the year” note (which implies average rate) basically “overrule” the FIFO note (which implies current rate)? Basically I’m observing the conflict in text here.
2. Accounts Payable: I know that A/P is a monetary asset so you should use the current rte of 1.32, but they provide additional text that says “The accounts payable on the fiscal 2008 balance sheet were all incurred on June 30, 2008.” The June 2008 rate is 1.37. So apparently you just ignore this note. What gives it away that this note should be ignored?
3. COGS: It is given as 1,667,250 which implies a rate of around 1.38, which is not provided. However, if this translated amount were not given as a note, what rate would you use? Is it historic rate since FIFO is used? Or is it average rate since inventory was bought and sold evenly throughout the year?
I KNOW this will be on the exam because it is a huge topic and there was not a single translation Q on last year’s exam. Thanks! |
发表于 2013-4-2 12:52
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