Ajax Manufacturing's German subsidiary has the following balance sheet(in DM):
Cash, marketable securities: 250,000
Accounts receivable 1,000,000
Inventory ( at market) 2,700,000
Fixed assets: 5,100,000
Total assets DM 9,050,000
Current liabilities DM 750,000
Long-term debt 3,400,000
Total liabilities plus equity: DM 9,050,000.
Suppose the DM appreciates from $0.70 to $0.76 during the period.
Under the monetary/nonmonetary method what is Ajax's traslation gain(loss)?© BrainMass Inc. brainmass.com December 24, 2021, 5:05 pm ad1c9bdddf
The monetary/nonmonetary method treats only monetary assets and liabilities as being exposed. All monetary balance sheets accounts (for example, cash, marketable, securities, accounts receivables, notes payable, accounts payable) of a foreign ...
The monetary/nonmonetary method is discussed.