U.S. Industries has a subsidiary in Switzerland. The subsidiary’s financial statements are mainta...
U.S. Industries has a subsidiary in Switzerland. The subsidiary’s financial statements are maintained in Swiss francs (CHF). Exchange rates ($/CHF) for selected dates are as follows:
| January 1, 2018 | $1.02 | November 30, 2020 | $1.08 | |
| January 1, 2019 | 1.04 | December 31, 2020 | 1.09 | |
| Average for 2020 | 1.06 |
The following items appear in the subsidiary’s trial balance at December 31, 2020:
1. Cash in bank, CHF4,000,000.
2. Inventory, CHF3,000,000. The inventory was acquired on November 30, 2020.
3. Machinery and equipment, CHF11,000,000. A review of the records indicates that the company bought equipment costing CHF5,000,000 in January 2018 (20 percent of this was sold in January 2020) and additional equipment costing CHF7,000,000 in January 2019. Ignore accumulated depreciation.
4. Depreciation expense on machinery and equipment, CHF1,100,000 (depreciated over ten years, straight-line basis).
Required
Calculate the dollar amount for each of the above items, assuming the functional currency of the Swiss subsidiary is
(a) the U.S. dollar and
(b) the Swiss franc.
Enter answers using all zeros (do not abbreviate to millions or thousands).
| (a) | (b) | ||
|---|---|---|---|
| Cash | $Answer | $Answer | |
| Inventory | $Answer | $Answer | |
| Machinery and equipment | $Answer | $Answer | |
| Depreciation expense | $Answer | $Answer |
Homework Answers
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U.S. Industries has a subsidiary in Switzerland. The subsidiary’s financial statements are mainta...
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Translation and Remeasurement of Account Balances U.S. Industries has a subsidiary in Switzerland. The subsidiary’s financial statements are maintained in Swiss francs (CHF). Exchange rates ($/CHF) for selected dates are as follows: January 1, 2018 $1.02 November 30, 2020 $1.08 January 1, 2019 1.04 December 31, 2020 1.09 Average for 2020 1.06 The following items appear in the subsidiary’s trial balance at December 31, 2020: 1. Cash in bank, CHF4,000,000. 2. Inventory, CHF3,000,000. The inventory was acquired on November 30,...
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Stephanie prepares consolidated financial statements on December
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trial balance in SFr is as follows:
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Credit
Cash
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8,800
Accounts Receivable (net)
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Plant & Equipment
110,000
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of a Swiss company for 4.0 million Swiss francs (CHF), which is
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exchange rate was $1.00 = CHF 1. On December 18, 2017, the book and
fair values of the subsidiary’s assets and liabilities were:
Cash
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814,000
Inventory
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Property, plant & equipment
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Notes payable
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Stephanie prepares consolidated financial statements on December
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Company as a subsidiary in Switzerland with an initial investment
cost of Swiss francs (SFr) 75,000. SunTime’s December 31, 20X1,
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Cash
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8,800
Accounts Receivable (net)
23,500
Receivable from Popular Creek
5,300
Inventory
25,500
Plant & Equipment
110,000
Accumulated Depreciation
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11,700
Accounts Payable
13,800
Bonds Payable
51,000
Common Stock
75,000
Sales
153,600
Cost of Goods Sold
71,000
Depreciation Expense
11,700
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