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Study Resources (Accounting)

Exercises 1) For each of the 12 accounts listed in the table below, select the correct exchange rate to use when either remeasuring or translating a foreign subsidiary for its U.S. parent company. Codes C = Current exchange rate H = Historical exchange rate A = Average exchange rate U.S. dollar isThe foreign the functionalcurrency is the currencyfunctional.
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12) On December 15, 2011, Electronix Company purchased inventory from a foreign supplier for 2,000,000 foreign currency units (fcu's). Payment will be made on February 13, 2012. On December 15, 2011, to hedge the transaction, Electronix signed a forward contract to buy 2,000,000 fcu's in 60 days. Electronix uses a.
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19) Each of the following accounts has been converted to U.S. dollars from a foreign subsidiary's financial statements. Based on the information given, determine if the U.S. dollar or a foreign currency is the functional currency of the subsidiary. F = Foreign Currency D = U.S. Dollar N/A = Cannot be determined 1.Cost of.
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11) Piel Corporation (a U.S. company) began operations on January 1, 2011, when common stock was issued for $250,000. In the first two months of operations, Piel had the following transactions: January 15, 2011Bought inventory for 100,000 Mexican pesos on account January 26, 2011Sold 70% of inventory acquired on 1/15/11 for 44,000.
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10) Slickton Corporation, a U.S. holding company, enters into a forward contract on November 1, 2011 to speculate in Singapore dollars (S$). The forward contract requires Slickton to sell 1,000,000 Singapore dollars to the exchange broker on January 30, 2012. Net settlement is not permitted. Relevant exchange rates for the.
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13) Astrotuff Company is planning to purchase 200,000 pounds of nylon from Tangsun Company. On November 1, 2011, Astrotuff entered into a 90-day forward contract to hedge the planned purchase. The forward contract is to purchase 200,000 pounds of nylon at $1.80 per pound (forward rate at November 1, 2011)..
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9) Plane Corporation, a U.S. company, owns 100% of Shipp Corporation, a Libyan company. Shipp's equipment was acquired on the following dates (amounts are stated in Libyan dinars): Jan. 01, 2011 Purchased equipment for 40,000 dinars Jul. 01, 2011 Purchased equipment for 80,000 dinars Jan. 01, 2012 Purchased equipment for 50,000 dinars Jul. 01,.
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13) Slade Corporation, a U.S. company, purchased materials on account from a manufacturer in Mexico on June 15. The invoice was denominated in the shipper's currency for 480,000 pesos. The goods were paid for on July 18. Slade closes their fiscal year on June 30, and used the following indirect.
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15) Par Industries, a U.S. Corporation, purchased Slice Company of New Zealand for $1,411,800 on January 1, 2011. Slice's functional currency is the New Zealand dollar (NZ$). Slice's books are kept in NZ$. The book values of Slice's assets and liabilities were equal to fair values, with the exception of.
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16) On January 1, 2011, Placid Corporation acquired a 40% interest in Superior Industries, a Canadian Corporation, for $811,900 when Superior's stockholders' equity consisted of 1,000,000 Canadian dollars (C$) capital stock and C$500,000 retained earnings. Superior's functional currency is the Canadian dollar and the books are kept in the same.
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11) Puddle Incorporated purchased an 80% interest in Soake Company, located in England. Puddle paid $1,560,000 on January 1, 2011, at a time when the book values of Soake equaled the fair values. Any excess cost/book value differential was attributed to a patent with a five-year remaining useful life. Soake's.
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Exercises 1) On September 1, 2011, Bylin Company purchased merchandise from Himeji Company of Japan for 20,000,000 yen payable on October 1, 2011. The spot rate for yen was $0.0079 on September 1 and the spot rate was $0.0077 on October 1. The purchase was paid on October 1, 2011. Required: 1. Did.
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11) Which one of the following operating segment disclosures is not required by GAAP? A) Total Assets B) Equity C) Intersegment sales D) Extraordinary items 12) Which one of the following operating segment information items is not directly named by GAAP to be reconciled to consolidated totals? A) Assets B) Liabilities C) Revenues D) Profit or loss 13) What is.
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Exercises 1) On November 1, 2011, Portsmith Corporation, a calendar-year U.S. corporation, invested in a purely speculative contract to purchase 1 million yen on January 30, 2012, from the Karoke Trading Company, a Japanese brokerage firm. Portsmith agreed to purchase 1,000,000 yen from Karoke at a fixed price of $0.0100 per.
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Multiple Choice Questions 1) A U.S. firm has a Belgian subsidiary that uses the British pound as its functional currency. According to GAAP, the U.S. dollar from Belgian unit's point of view will be A) its only foreign currency. B) its local currency. C) its current rate method currency. D) its reporting currency. 2) Selvey Inc..
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Multiple Choice Questions 1) Similar operating segments may be combined if the segments have similar economic characteristics. Which one of the following is a similar economic characteristic under GAAP? A) The segments' management teams B) The tax reporting law sections C) The distribution method for products or services D) The expected rates of return and.
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Multiple Choice Questions 1) Which of the following hedging strategies would a business most likely use? A) An importer will want to hedge his foreign denominated accounts receivable and will purchase forward contracts to hedge an exposed net asset position. B) An importer will want to hedge his foreign denominated accounts payable and.
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10) Phim Inc., a U.S. company, owns 100% of Sera Corporation, a New Zealand company. Sera's equipment was acquired on the following dates (amounts are stated in New Zealand dollars as NZ$): Jan. 01, 2011 Purchased equipment for NZ$40,000 Jul. 01, 2011 Purchased equipment for NZ$80,000 Jan. 01, 2012 Purchased equipment for NZ$50,000 Jul..
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Exercises 1) The accountant for Baxter Corporation has assigned most of the company's assets to its three segments as follows: Electronics$1,760,000 Hardware3,420,000 Plumbing490,000 Total$5,670,000 The unassigned assets consist of $430,000 of unallocated goodwill and $270,000 of assets attached to the corporate headquarters. For internal decision-making purposes, goodwill is not assigned to the segments and the assets.
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7) On January 1, 2011, Pilgrim Corporation, a U.S. firm, acquired ownership of Settlement Corporation, a foreign company, for $168,000, when Settlement's stockholders' equity consisted of 300,000 local currency units (LCU) and retained earnings of 100,000 LCU. At the time of the acquisition, Settlement's assets and liabilities were fairly valued.
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11) Accounts representing an allowance for uncollectible accounts are converted into U.S. dollars at A) historical rates when the U.S. dollar is the functional currency. B) current rates only when the U.S. dollar is the functional currency. C) historical rates regardless of the functional currency. D) current rates regardless of the functional currency. 12) Palk.
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5) On November 1, 2010, Mayberry Corporation, a U.S. corporation, purchased from Cantata Corporation, a Mexican company, some machinery that cost 1,000,000 pesos. The invoice was payable in pesos on January 30, 2011. To hedge against rapid changes in the peso, Mayberry entered into a forward contract on November 1,.
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19) Charin Corporation, a U.S. corporation, imports and exports small electronics. On December 1, 2011, Charin purchased components from an Egyptian manufacturer amounting to 500,000 Egyptian pounds. The purchase is payable in Egyptian pounds. At December 30, Charin wanted to take advantage of favorable exchange rates, but did not have.
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7) On November 1, 2010, Stateside Company (a U.S. manufacturer) sold an airplane for 1 million New Zealand dollars (NZ$) to New Zealand company Aukland Corporation. Stateside will receive payment on January 30, 2011 in New Zealand dollars. In order to hedge the accounts receivable position, Stateside entered into a.
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8) On November 1, 2010, Ironside Company (a U.S. manufacturer) sold an airplane for 1 million New Zealand dollars (NZ$) to a New Zealand company, Wellington Corporation. Ironside will receive payment on January 30, 2011 in New Zealand dollars. In order to hedge the accounts receivable position, Ironside entered into.
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3) Pan Corporation, a U.S. company, formed a British subsidiary on January 1, 2012 by investing 450,000 British pounds (£) in exchange for all of the subsidiary's no-par common stock. The British subsidiary, Skillet Corporation, purchased real property on April 1, 2012 at a cost of £500,000, with £100,000 allocated.
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14) On January 1, 2011, Psalm Corporation purchased all the stock of Solomon Corporation for $481,400 when Solomon had capital stock of 180,000 pounds (£) and retained earnings of 90,000£. The book value of Solomon's assets and liabilities represented the fair value, except for equipment with a 5-year life that.
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8) Plate Corporation, a US company, acquired ownership of Saucer Corporation of Switzerland on January 1, 2011 for $1,500,000 when Saucer's stockholders' equity in Swiss francs (SF) consisted of 700,000 SF Capital Stock and 300,000 SF Retained Earnings. The exchange rate for Swiss francs was $1.20 on January 1. All.
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