Translation of foreign currency financial statements
Foreign Currency Financial Statements
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- Fenwicke company.xlsx
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- Fenwicke company.xlsx
Fenwicke company began operating a subsidiary in a foreign country on January 1, 2009, by acquring all of it's common stock
for LCU 40,000 which was equal to fair value. The subsidiary immediately borrowed LCU 40,000, which was equal to fair value
The subsidiary immediately borrowed LCU 100,000 on a five year note with 10 percent interest payable annually beginning
on January 1,2010. The subsidiary than purchased for LCU 140,00 a building that had a 10 year antipated life and no salvage
value and is to be depreciated using the straight-line method. The subsidiary rents the building for three years to a group
of local doctors for LCU 5,000 per month. By year end, payments totaling LCU 50,000 had been received. On october 1, LCU
4,000 was paid for a repair on that date. The subsidiary transferred a cash dividend of LCU 5,000 back to Fenwicke on
Decemeber 31, 2009. The functional currency for the subsidiary is the LCU. Currency Exchange rates for 1 LCU follow:
January 1, 2009…………………………$2.00= LCU 1
October 1, 2009………………………….1.85= 1
Average for 2009………………………..1.90= 1
December 31, 2009……………………..1.80= 1
Prepare an income statement , statement of retained earnings , and balance sheet for the subsidiary in LCU and then
translate these amounts into U.S. Dollars.
acquring all of it's common stock
000, which was equal to fair value.
st payable annually beginning
ar antipated life and no salvage
ng for three years to a group
en received. On october 1, LCU
000 back to Fenwicke on
e rates for 1 LCU follow:
bsidiary in LCU and then
Financial Statement Translation
Prepare financial statements for a foreign subsidiary and then translate them into U.S. dollars. The first item has been completed
Fenwicke Company Subsidiary
Income Statement
LCU U.S.
Dollars
Rent revenue 60,000 x $1.90 A $114,000
=
Interest expense
Depreciation expense
Repair expense
Net income
Statement of Retained Earnings
LCU U.S.
Dollars
Retained earnings 1-Jan -0- -0-
Net income
Dividends paid
Retained earnings, 12/31
Balance Sheet
LCU
Cash
Accounts receivable
Building
Accumulated depreciation
Total assets
Interest payable
Note payable
Common stock
Retained earnings
Translation adjustment
Total liabilities and equities
em has been completed for you as an example.
U.S. Dollars
"Hello YOY % percent means Year over year and also I am unable to view it says I don't have auth to view the file."
"Thanks. I really appreciate your help."
"Hi! I am not entirely sure how the table was constructed. What equations were used to find NPV, payback, PI, and IRR? Thank you! Wonderful job. :) I just needed to deconstruct it and study it for the exam and the core equations would help tremendously."
"Thank you for your assistance."
"You are good at what you do but some more explanation would have been greatly appreciated."