Zugar Company is domiciled in a country whose currency is the dinar. Zugar begin

Question

Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2017 with three assets: cash of 29,200 dinars accounts receivable of 82,200 dinars, and land that cost 222,000 dinars when acquired on April 1, 2016. On January 1, 2017, Zugar has a 172,000 dinar note payable, and no other liabilities. On May 1, 2017, Zugar renders services to a customer for 142,000 dinars, which was immediately paid in cash. On June 1, 2017, Zugar incurred a 122,000 dinar operating expense, which was immediately paid in cash. No other transactions occurred during the year. Currency exchange rates for 1 dinar follow: April 1, 2016 January 1, 2017 May 1, 2017 June 1, 2017 December 31, 2017 $0.55 = 1 dinar 0.59 1 0.61 1 a. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the dinar is the subsidiary's functional currency. What is the translation adjustment for this subsidiary for the year 2017? also that the U.S. dollar is the subsidiary's functional currency. What is the remeasurement gain or loss for 2017? translated value of the Land account? On the December 31, 2017, balance sheet, what is the remeasured value of the Land account? b. Assume that Zugar is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume c. Assume that Zugar is a foreign subsidiary of a U.S. multinational company. On the December 31, 2017, balance sheet, what is the (Input all amounts as positive.) ositive translation adjustment b. Gain remeasurement c. Translated value of land Remeasured value of land

Explanation / Answer

a. Statement Showing Transalation Adjustment for Subsidiary for the year 2017 Detail Amount ( In Dinnar) Exchange Rate ( 1 Dinnar= S Amount (In Dollar) Net Asset Cash            29,200 Account Receivable            82,200 Land          222,000 Less: Note Payable       (172,000) Net Asset as on 01/01/2017          161,400 0.58                           93,612 Add: Cash Received on 01/05/2017          142,000 0.59                           83,780 Less: Cash Paid on 01/06/2017       (122,000) 0.61                         (74,420) Net Asset          181,400                         102,972 Net Asset as on 31 Dec 2017          181,400 0.63                         114,282 Less: Restated Net Asset as on 31 Dec 2017                         102,972 Positive translation Adjustment to be made                           11,310 b. Computation of Remeasurement Gain or Loss for 2017 Detail Amount ( In Dinnar) Exchange Rate ( 1 Dinnar= S Amount (In Dollar) Net Asset Cash            29,200 Account Receivable            82,200 Less: Note Payable       (172,000) Net Asset as on 01/01/2017          (60,600) 0.58                         (35,148) Add: Cash Received on 01/05/2017          142,000 0.59                           83,780 Less: Cash Paid on 01/06/2017       (122,000) 0.61                         (74,420) Net Asset          (40,600)                         (25,788) Net Asset as on 31 Dec 2017          (40,600) 0.63                         (25,578) Less: Restated Net Asset as on 31 Dec 2017                         (25,788) Remeasurement Gain                                 210 Note: Adjustment made only for Monetary Account , Land are not considered for the same. C. Computation of Remeasured Value of Land Detail Amount in $ Remark Transalation value of Land Account          139,860 Exchange rate is of Dec 31,2017 ( 222000 * 0.63) Remeasured Value of Land Account is          122,100 Exchange rate is of Acquistion Date ( 222000 * 0.55

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