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    Tugas C12

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    Yandra Febriyanti
    PMI purchased 100% of Sandora on December 31, Year 1. Sandora's financial statements as of that date and its income statement for Year 2 are provided in US dollars. The document also provides the relevant exchange rates for the periods and asks to calculate any exchange gains or losses and translate the financial statements assuming either the US dollar or Canadian dollar as Sandora's functional currency. For the second document, P Company purchased 90% of S Company on January 1, Year 1. S Company's opening balance sheet is provided in foreign currency units (FC) along with the relevant exchange rates. The individual financial statements of P Company and S Company as of December 31, Year 1 are also provided. The document asks to

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    Tugas C12

    Uploaded by

    Yandra Febriyanti
    357 views2 pages
    PMI purchased 100% of Sandora on December 31, Year 1. Sandora's financial statements as of that date and its income statement for Year 2 are provided in US dollars. The document also provides the relevant exchange rates for the periods and asks to calculate any exchange gains or losses and translate the financial statements assuming either the US dollar or Canadian dollar as Sandora's functional currency. For the second document, P Company purchased 90% of S Company on January 1, Year 1. S Company's opening balance sheet is provided in foreign currency units (FC) along with the relevant exchange rates. The individual financial statements of P Company and S Company as of December 31, Year 1 are also provided. The document asks to

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    PMI purchased 100% of Sandora on December 31, Year 1. Sandora's financial statements as of that date and its income statement for Year 2 are provided in US dollars. The document also provides the relevant exchange rates for the periods and asks to calculate any exchange gains or losses and translate the financial statements assuming either the US dollar or Canadian dollar as Sandora's functional currency. For the second document, P Company purchased 90% of S Company on January 1, Year 1. S Company's opening balance sheet is provided in foreign currency units (FC) along with the relevant exchange rates. The individual financial statements of P Company and S Company as of December 31, Year 1 are also provided. The document asks to

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    357 views2 pages

    Tugas C12

    Uploaded by

    Yandra Febriyanti
    PMI purchased 100% of Sandora on December 31, Year 1. Sandora's financial statements as of that date and its income statement for Year 2 are provided in US dollars. The document also provides the relevant exchange rates for the periods and asks to calculate any exchange gains or losses and translate the financial statements assuming either the US dollar or Canadian dollar as Sandora's functional currency. For the second document, P Company purchased 90% of S Company on January 1, Year 1. S Company's opening balance sheet is provided in foreign currency units (FC) along with the relevant exchange rates. The individual financial statements of P Company and S Company as of December 31, Year 1 are also provided. The document asks to

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    of 2

    P11-1 On December 31, Year 1, Precision Manufacturing Inc.

    (PMI) of Edmonton purchased


    100% of the outstanding ordinary shares of Sandora Corp. of Flint, Michigan.
    Sandora’s comparative statement of financial position and Year 2 income statement are
    as follows:

    Additional Information
    • Exchange rates
    Dec. 31, Year 1 US$1 = CDN$1.10
    Sep. 30, Year 2 US$1 = CDN$1.07
    Dec. 31, Year 2 US$1 = CDN$1.05
    Average for Year 2 US$1 = CDN$1.08
    • Sandora declared and paid dividends on September 30, Year 2.
    • The inventories on hand on December 31, Year 2, were purchased when the
    exchange rate was US$1 = CDN$1.06.
    Required:
    (a) Assume that Sandora’s functional currency is the Canadian dollar:
    (i) Calculate the Year 2 exchange gain (loss) that would result from the
    translation of Sandora’s financial statements.
    (ii) Translate the Year 2 financial statements into Canadian dollars.
    (b) Assume that Sandora’s functional currency is the U.S. dollar:
    (i) Calculate the Year 2 exchange gain (loss) that would result from the
    translation of Sandora’s financial statements and would be reported in other
    comprehensive income.
    (ii) Translate the Year 2 financial statements into Canadian dollars.

    P11-4 On January 1, Year 1, P Company (a Canadian company) purchased 90% of S Company


    (located in a foreign country) at a cost of 14,400 foreign currency units (FC).
    The carrying amounts of S Company’s net assets were equal to fair values on this date
    except for plant and equipment, which had a fair value of FC22,000, with a remaining
    useful life of 10 years. A goodwill impairment loss of FC100 occurred evenly throughout
    Year 1.
    The following exchange rates were in effect during Year 1:
    Jan. 1 FC1 = $1.10
    Average for year FC1 = $1.16
    When ending inventory purchased FC1 = $1.19
    Dec. 31 FC1 = $1.22
    The statement of financial position of S Company on January 1, Year 1, is as follows:
    S Company (FC)
    Plant and equipment (net) 20,000
    Inventory 8,000
    Monetary assets (current) 10,000
    38,000
    Ordinary shares 10,000
    Retained earnings 3,000
    Bonds payable (mature in eight years) 16,000
    Current liabilities 9,000
    38,000
    The December 31, Year 1, financial statements of P Company (in $) and S Company (in
    FC) are shown below:

    Dividends were declared on December 31, Year 1, in the amount of $22,000 by P


    Company and FC4,000 by S Company.
    Required:
    Prepare the December 31, Year 1, consolidated financial statements, assuming that S
    Company’s functional currency is each of the following:
    (i) The Canadian dollar
    (ii) The foreign currency unit

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