Topic: Weeks 10 to 14- PART III Accounting for foreign currency

How much should the local entity Layla Tank Co. accrue for royalties payable on December 31, 2021?

• a. 139,500

• b. 139,400

• c. 139,450

• d. 139,500

2. Batang Quiapo Co. acquired inventory from a foreign entity on November 28, 2021 for 10,000 foreign currency units (FCU). Little Boy Blue paid the bill on January 2, 2022 when the spot rate was P0.45. The spot rate was P0.60 on November 28, 2021 and was P0.55 on December 31, 2021. For the year ended December 31, 2022, Batang Quiapo Co. should report a foreign exchange gain of

• a. 0

• b. 500

• c. 1,000

• d. 1,500

3. A transaction gain or loss on the settlement date is:

• a. associated with the conversion of foreign currency financial statements to USD.

• b. the difference between the recorded dollar value of a foreign currency-denominated account receivable and the amount received in dollars.

• c. the difference between the purchasing and selling rates quoted by a foreign exchange trader on the settlement date.

• d. a fluctuation in the exchange rate quoted by a foreign exchange trader.

How much inventory from the transaction is included in Ang Galing’s 2023 statement of financial position?

• a. 7,384,000.00

• b. 7,156,500.00

• c. 7,501,000.00

• d. None of the above

In Van Der Linde’s 20x4 profit or loss, what amount should be included as foreign exchange loss?

• a. 0

• b. 6,000

• c. 21,000

• d. 27,000

How much unrealized foreign exchange gain or loss will O’Driscoll Company recognize in its consolidated financial statements as of December 31, 2024, due to this transaction?

• A. $3,260 unrealized foreign exchange gain

• B. $3,260 unrealized foreign exchange loss

• C. $3,478 unrealized foreign exchange gai

• D. $3,478 unrealized foreign exchange loss

7. What is the translated retained earnings balance on December 31, 2024?

• a. P316, 600

• b. P295,400

• c. P204,600

• d. P306,000

8. What is the cumulative translation credit that should be presented in the statement of financial position on December 31, 2024?

• a. P217,100

• b. P0

• c. P195,900

• d. P307,800

9.) In translating a foreign subsidiary's financial statements, which exchange rate does the current method require for the subsidiary's assets and liabilities?

• A) the exchange rate in effect when each asset or liability was acquired.

• B.) the average exchange rate for the current year.

• C) a calculated exchange rate based on market value.

• D) the exchange rate in effect as of the balance sheet date

10.) Gaybin reported sales of £1,500,000 during 2011. What amount (rounded) would have been included for this subsidiary in calculating consolidated sales?

• A. 2,415,000.

• B. 2,400,000.

• C. 2,385,000.

• D. 943,396.