Translation Gain/(Loss) using Current/Noncurrent Methods
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
Equity 4,900,000
Total liabilities plus equity: DM 9,050,000.
Suppose the DM appreciates from $0.70 to $0.76 during the period.
Under the current/noncurrent method what is Ajax's traslation gain(loss)?
© BrainMass Inc. brainmass.com October 9, 2019, 4:15 pm ad1c9bdddfhttps://brainmass.com/economics/exchange-rates/translation-gain-loss-current-noncurrent-methods-27036
Solution Summary
The solution calculates translation gain(loss) using current/noncurrent method in the attached Excel file.
$2.19