Ask Question, Ask an Expert

+1-415-315-9853

info@mywordsolution.com

Ask Accounting Basics Expert

Ran Company bought all of a Danish company for 8 million kroner (DKK) on Dec 21, Year 1. On December 21, the exchange rate was $0.70 per DKK. The prucahse price was based on the following assets and liabilities, denominated in DKK.

Cash 1,000,000
Inventory 2,000,000
Plant Assets 7,000,000
Note payable (1,800,000)

Tran has a 12/31 balance sheet date. On 12/31/Y1, the DKK had appreciated to $0.75. Since the purchase date was so close to the end year, management had given all employees those 10 between the purchase and year-end off for the holidays-which means no transaction occurred...

1. If the DKK is the functional currency for the subsidiary, determine the translation adjustment for Tran's yearend consolidated financials. Show your work.

2. What is the economic relevance of this adjustment in 1?

3. If the US Dollar is the functional currency, determine the translation adjustment for Tran's yearend consolidated financials. Show your work.

4. What is the economic relevance of this adjustment in 3?

5. How can companies protect them selves from having to report large currency translation adjustments?

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M945737

Have any Question? 


Related Questions in Accounting Basics

Accounting discussion questionaccounts receivable bad debt

Accounting Discussion Question "Accounts Receivable Bad Debt Expense (Direct Write Off Method Vs Allowance Method)": • Discuss the primary advantages and disadvantages of applying the direct write-off over the allowance ...

Accounting for nonfinancial assets will experience some

Accounting for nonfinancial assets will experience some major changes with the convergence to IFRS. One of the key issues will be that of fair value. Research this topic, and give your argument for or against the use of ...

Problem -a firm has the following probability distribution

Problem - A firm has the following probability distribution for annual losses due to vandalism. All amounts are before any tax consideration. The firm has a tax rate of 20%. Annual Losses Probability $ 0 .75 $ 4,000 .20 ...

Question 1how would outstanding checks be handled when

Question 1 How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance? A. They would be added to the balance of the bank statement. B. The ...

What are the effects on equitiesfinancial statement effect

What are the effects on equities? Financial Statement Effect of Equity Securities Presented below is a situation involving equity securities: An equity security, whose fair value is currently less than cost, is classifie ...

Accountingflexible budgets and cost variances please

Accounting Flexible Budgets and Cost Variances: Please respond to one of the following: Option 1 Suggest how management can use the real-time variance data analysis to improve operations. Evaluate the potential risk that ...

Shown below is activity for one of the products of denver

Shown below is activity for one of the products of Denver Office Equipment: January 1 balance, 500 units @ $55 $27,500 Purchases January 10 500 units @ $60 January 20 1,000 units @ $63 Sales: January 12 800 units January ...

In your own words explain the recording process and the

In your own words, explain the recording process and the accounting equation to someone who has no accounting experience. Then, give your opinion on the elements or areas that might cause the most confusion or be the mos ...

Cost accounting systemsconsider the places of employment of

Cost Accounting Systems Consider the places of employment of the team members or businesses with which the team is familiar and the industries in which they operate. Create a 12-slide presentation, including detailed spe ...

Accounting assignmentthree personal trainers at an upscale

Accounting Assignment Three personal trainers at an upscale health spa / resort in Sedona, Arizona, want to start a health club that specializes in health plans for people in the 50+ age range. The trainers Donna Rinaldi ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen