Q44. The Precision Screen Printers (PSP) Company has a foreign subsidiary, the Acer Tool & Die Company, located in the country of Rolivia. The currency of Rolivia is the Chad. The balance sheet and income statement of Acer Tool & Die Company for the year-ended December 31, 2002, is shown below. The balance sheet has been restated using the U.S. dollar as the functional currency. Acer Tool & Die Company Balance Sheet As of December 31, 2002
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| Chad (millions) | Exchange Rate (Chad/US$) | U.S. $ (millions) | Cash | 20 |
| 0.25 |
| $80 |
| Accounts receivable | 30 | 0.25 | 120 | Inventory | 100 | 0.3125 | 320 | Fixed assets (net) | 500 | 0.3333 | 1,500 | Total assets | 650 |
| $2,020 |
| Accounts payable | 50 |
| 0.25 |
| $200 |
| Capital stock | 380 | 0.3333 | 1,140 | Retained earnings | 220 | -- | 680 | Total liabilities and equity | 650 |
| $2,020 | Acer Tool & Die Company Income Statement For year ending December 31, 2002 (Amounts in millions of Chad) | Revenues | 1,000 | Cost of sales | 700 | Depreciation expense | 50 | Selling expense | 30 | Net income | 220 | | | | | | | | |
The exchange rate at the beginning of 2002 was 0.3333 Chad/US$. The exchange rate at the end of 2002 was 0.25 Chad/US$. The average rate for 2002 is 0.3125 Chad/US$. Beginning inventory is 90 Chad. Acer Tool & Die uses FIFO inventory valuation and depreciates fixed assets using the straight-line method. Using the current rate method for the Acer Tool & Die Company, what is the value of total assets after translation? A) $2,600. B) $2,020. C) $1,950.
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发表于 2009-1-17 16:10
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