Exam 11: Translation and Consolidation of Foreign Operations

Translate Wilsen's December 31, 2017 Statement of Retained Earnings if Wilsen was considered to be a self-sustaining foreign operation (i.e., the functional currency of the foreign operation is different than the parent).

If Maker is considered to be a self-sustaining foreign subsidiary (i.e., the functional currency of the foreign operation is different than the parent), what amount will be shown for amortization expense on its translated Canadian dollar financial statements as at December 31, 2017?

Under the presentation currency translation (PCT) method, which of the following statements is correct?

Which of the following statements is correct?

Which of the following rates would be used to translate the company's beginning retained earnings?

The risk exposure resulting from the translation of foreign-currency-denominated financial risks is referred to as:

Compute Wilsen's exchange gain or loss for 2017 if Wilson is considered to be an integrated subsidiary (i.e., the functional currency of the foreign operation is the same as the parent).

Which of the following rates would be used to translate the company's sales?

On January 1, 2017, Larmer Corp. (a Canadian company) purchased 80% of Martin Inc, an American company, for US$50,000. Martin's book values approximated its fair values on that date except for plant and equipment, which had a fair value of US$30,000 with a remaining life expectancy of 5 years. A goodwill impairment loss of US$1,000 occurred during 2017. Martin's January 1, 2017 Balance Sheet is shown below (in U.S. dollars): Current Monetary Assets \ 50,000 muentory \ 40,000 Plant and Equipment \ 25,000 Total Assets \ 115,000 Current Liabilities \ 45,000 Bonds Pay able (maturity: January 1, 2022) \ 20,000 Common Shares 30,000 Retained Earnings \ 20,000 Total Labilities and Equity \ 115,000 The following exchange rates were in effect during 2017: January 1,2017: US\ 1=CDN\ 1.3260 Average for 2017: US\ 1=CDN\ 1.3360 Date when Inventory Purchased: US\ 1= CDN \ 1.34 December 31,2017: US\ 1= CDN \ 1.35 Dividends declared and paid December 31, 2017. The financial statements of Larmer (in Canadian dollars) and Martin (in U.S. dollars) are shown below: Balance Sheets -Translate Martin's 2017 Income Statement into Canadian dollars if Martin is considered to be a self-sustaining foreign subsidiary (i.e., the functional currency of the foreign operation is different than the parent).

Which of the following rates would be used to translate the company's other expenses?

The risk exposure resulting from the possible reduction in terms of the domestic reporting foreign currency, of the discounted future cash flows generated from foreign investments or operations due to real changes in exchange rates is referred to as:

Which of the following rates would be used to translate the company's common shares?

Which of the following rates would be used to translate the company's Assets and Liabilities?

If the functional currency of the foreign entity is the same as the parent's functional currency, which of the following statements is correct?

On January 1, 2017, Larmer Corp. (a Canadian company) purchased 80% of Martin Inc, an American company, for US$50,000. Martin's book values approximated its fair values on that date except for plant and equipment, which had a fair value of US$30,000 with a remaining life expectancy of 5 years. A goodwill impairment loss of US$1,000 occurred during 2017. Martin's January 1, 2017 Balance Sheet is shown below (in U.S. dollars): Current Monetary Assets \ 50,000 muentory \ 40,000 Plant and Equipment \ 25,000 Total Assets \ 115,000 Current Liabilities \ 45,000 Bonds Pay able (maturity: January 1, 2022) \ 20,000 Common Shares 30,000 Retained Earnings \ 20,000 Total Labilities and Equity \ 115,000 The following exchange rates were in effect during 2017: January 1,2017: US\ 1=CDN\ 1.3260 Average for 2017: US\ 1=CDN\ 1.3360 Date when Inventory Purchased: US\ 1= CDN \ 1.34 December 31,2017: US\ 1= CDN \ 1.35 Dividends declared and paid December 31, 2017. The financial statements of Larmer (in Canadian dollars) and Martin (in U.S. dollars) are shown below: Balance Sheets -Prepare Larmer's December 31, 2017 Consolidated Balance Sheet if Martin is considered to be an integrated foreign subsidiary (i.e., the functional currency of the foreign operation is the same as the parent).

Under the functional currency translation (FCT) method, which of the following statements is correct?

On January 1, 2017, Larmer Corp. (a Canadian company) purchased 80% of Martin Inc, an American company, for US$50,000. Martin's book values approximated its fair values on that date except for plant and equipment, which had a fair value of US$30,000 with a remaining life expectancy of 5 years. A goodwill impairment loss of US$1,000 occurred during 2017. Martin's January 1, 2017 Balance Sheet is shown below (in U.S. dollars): Current Monetary Assets \ 50,000 muentory \ 40,000 Plant and Equipment \ 25,000 Total Assets \ 115,000 Current Liabilities \ 45,000 Bonds Pay able (maturity: January 1, 2022) \ 20,000 Common Shares 30,000 Retained Earnings \ 20,000 Total Labilities and Equity \ 115,000 The following exchange rates were in effect during 2017: January 1,2017: US\ 1=CDN\ 1.3260 Average for 2017: US\ 1=CDN\ 1.3360 Date when Inventory Purchased: US\ 1= CDN \ 1.34 December 31,2017: US\ 1= CDN \ 1.35 Dividends declared and paid December 31, 2017. The financial statements of Larmer (in Canadian dollars) and Martin (in U.S. dollars) are shown below: Balance Sheets -Compute Martin's exchange gain or loss for 2017 if Martin is considered to be a self-sustaining foreign subsidiary (i.e., the functional currency of the foreign operation is different than the parent).

If Maker is considered to be an integrated foreign subsidiary (i.e., the functional currency of the foreign operation is the same as the parent), what amount will be shown for amortization expense on its translated Canadian dollar financial statements as at December 31, 2016?

If Maker is considered to be a self-sustaining foreign subsidiary (i.e., the functional currency of the foreign operation is different than the parent), what amount will be shown for amortization expense on its translated Canadian dollar financial statements as at December 31, 2016?

Which of the following statements is correct?