74.
| LC |
Revenues | 520,000 |
COGS | 225,000 |
SG&A | 100,000 |
Depreciation | 80,000 |
Income Taxes | 46,000 |
Net Income | 69,000 |
What is the amount of income Seven Seas should report from its
A) 34,500 USD.
B) 27,600 USD.
C) 19,636 USD.
D) 31,364 USD.
75.t year Seven Seas reported balance sheet retained earnings of 90,000 USD for its
A) 121,364 USD.
B) 113,364 USD.
C) 8,000 USD.
D) 23,364 USD.
76. balance sheet for
| LC |
Cash | 25,000 |
Accounts Receivable | 30,000 |
Inventory | 35,000 |
Net Fixed Assets | 500,000 |
| |
Total Assets | 590,000 |
| |
Accounts Payable | 20,000 |
Long term debt | 100,000 |
Common Stock | 250,000 |
Retained Earnings | 220,000 |
| |
Total Liabilities & Equity | 590,000 |
What is the amount of the currency translation adjustment that results from the translation of
A) 21,636 USD.
B) - 3,364 USD.
C) 135,000 USD.
D) There is no currency translation adjustment under the all-current method.
74.
| LC |
Revenues | 520,000 |
COGS | 225,000 |
SG&A | 100,000 |
Depreciation | 80,000 |
Income Taxes | 46,000 |
Net Income | 69,000 |
What is the amount of income Seven Seas should report from its
A) 34,500 USD.
B) 27,600 USD.
C) 19,636 USD.
D) 31,364 USD.
The correct answer was D)
| LC | Conversion | USD | |
Revenues | 520,000 | /2.2 | 236,364 | average rate |
COGS | 225,000 | /2.2 | 102,273 | average rate |
SG&A | 100,000 | /2.2 | 45,455 | average rate |
Depreciation | 80,000 | /2.2 | 36,364 | average rate |
Income Taxes | 46,000 | /2.2 | 20,909 | average rate |
Net Income | 69,000 | | 31,364 | |
75.t year Seven Seas reported balance sheet retained earnings of 90,000 USD for its
A) 121,364 USD.
B) 113,364 USD.
C) 8,000 USD.
D) 23,364 USD.
The correct answer was B)
Dividends are translated at the rate 2LC/USD. Therefore, the 16,000 LC dividend is equivalent to 16,000LC/2 = 8,000 USD. Net income less dividends equals the current period retained earnings of 23,364 USD (31,364 USD – 8,000 USD). The balance sheet retained earnings is the sum of last year’s and the current period’s retained earnings or 113,364 USD (90,000 + 23,364).
76. balance sheet for
| LC |
Cash | 25,000 |
Accounts Receivable | 30,000 |
Inventory | 35,000 |
Net Fixed Assets | 500,000 |
| |
Total Assets | 590,000 |
| |
Accounts Payable | 20,000 |
Long term debt | 100,000 |
Common Stock | 250,000 |
Retained Earnings | 220,000 |
| |
Total Liabilities & Equity | 590,000 |
What is the amount of the currency translation adjustment that results from the translation of
A) 21,636 USD.
B) - 3,364 USD.
C) 135,000 USD.
D) There is no currency translation adjustment under the all-current method.
The correct answer was A)
| LC | Conversion | USD | |
Cash | 25,000 | /2.0 | 12,500 | current rate |
Accounts Receivable | 30,000 | /2.0 | 15,000 | current rate |
Inventory | 35,000 | /2.0 | 17,500 | current rate |
Net Fixed Assets | 500,000 | /2.0 | 250,000 | current rate |
| | | | |
Total Assets | 590,000 | | 295,000 | |
| | | | |
Accounts Payable | 20,000 | /2.0 | 10,000 | current rate |
Long term debt | 100,000 | /2.0 | 50,000 | current rate |
Common Stock | 250,000 | /2.5 | 100,000 | historical rate |
Retained Earnings | 220,000 | | 113,364 | answer from part 2 |
Translation adjustment | | | 21,636 | Plug |
Total Liabilities & Equity | 590,000 | | 295,000 | |
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