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Foreign currency translation problem

(See attached file for full problem description)

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Translation Problem -
Translate the following financials using the current rate method. Relevant rates are as follows:
1/1/04 1 bobb = $ .85 US
10/1/04 1 bobb = $. 80
12/31/04 1 bobb = $ .66
Weight average 1 bobb = $ .785

The rate in effect on the date of incorporation was .52.

Dividends of 5,000 bobbs were paid on October 1, 2004

Income Statement
bobbs Ex Rate US Dollars
Revenues 84,000
Cost of Sales 62,000
Gross margin 22,000
Salaries 11,000
Operating Expenses 3,500
IBIT 7,500
Taxes 2,000
Net Income 5,500

Statement of Retained Earnings
bobbs Ex Rate US Dollars
Retained Earnings 1/1/04 23,500 N/A $19,975
Add: Income
Less: Dividends
Retained Earnings 12/31/04 .66

Balance Sheet
bobbs Ex Rate US Dollars
ASSETS
Cash 14,000
Accounts Receivable 28,000
Inventory 57,000
Land 35,000
Total Assets 134,000

LIABILITIES & EQUITY
Accounts Payable 10,000
Common Stock 100,000
Retained Earnings 24,000
Cumulative Adjustment
Total Liabilities & Equity 134,000
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Solution Summary

Classic problem!

$2.19