You are reviewing your client's Multicurrency company Balance Sheet, and the balance as of the previous fiscal year-end for their Canadian bank account, which they closed last year, is a $10 debit balance in US dollars (the home currency). However, the Canadian dollar balance correctly indicates the account has been closed. Why would this be the case? 1. You have to create a journal entry debiting foreign exchange gain or loss $10 and crediting the Canadian bank account $10.
2. The Canadian bank account has not been reconciled as of the last fiscal year.
3. The Balance Sheet shows the cumulative balance of the account in the home currency based on the home currency value of each of the transactions using the exchange rate that appears on each screen.
4. You have to perform a home currency adjustment for the Canadian bank account as of the current date
5. You have to perform a home currency adjustment for the Canadian bank account as of the last fiscal year.
Answers
Answer:
1. You have to create a journal entry debiting foreign exchange gain or loss $10 and crediting the Canadian bank account $10.
4. You have to perform a home currency adjustment for the Canadian bank account as of the current date
Explanation:
This difference is the result of a foreign exchange loss. Foreign exchange gains/losses are normal for companies that operate in foreign countries. E.g. you prepared your financial statements by converting the foreign currency into your local currency, in this case you converted Canadian dollars to US dollars. But then the exchange rate between the currencies changes. If the value of the Canadian dollar's value increased after conversion, then you gained, and an adjustment must be made to show that gain. But if the Canadian dollar's value decreased after the conversion, then you lost (what happened here) and an adjusting entry must be made to report the loss.
In order to correct his, you must:
Dr Foreign exchange gain/loss 10
Cr Canadian bank account 10
Final answer:
The balance in the Canadian bank account is correctly shown as closed because the Balance Sheet reflects the cumulative balance in the home currency.
Explanation:
The reason why the balance in the Canadian bank account is correctly shown as closed is because the Balance Sheet reflects the cumulative balance of the account in the home currency based on the home currency value of each transaction.
Therefore, even though the account had a $10 debit balance in US dollars, the Canadian dollar balance correctly indicates that the account has been closed.
No journal entry or reconciliation needs to be done for the closed Canadian bank account.
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Related Questions
In the current year, Tim sells Section 1245 property for $28,000 that he had purchased 6 years ago. Tim has claimed $7,000 in depreciation on the property and originally purchased it for $20,000. How much of the gain is taxable as ordinary income
Compared to a perfectly competitive firm, a monopolist____________.A. will, according to Schumpeter, invest fewer resources in research and development.B. is less likely to face government regulation. C. is less likely to advertise. D. usually produces an inefficiently small level of output.
Crane uses the periodic inventory system. For the current month, the beginning inventory consisted of 7400 units that cost $11.00 each. During the month, the company made two purchases: 3100 units at $12.00 each and 12200 units at $12.50 each. Crane also sold 12700 units during the month. Using the average cost method, what is the amount of cost of goods sold for the month
How does the government pay for roads schools and emergency services?
Answers
Answer:
a. At what price will the bond sell?
- $102.71
b. What will the yield to maturity on the bond be?
- 0.0952 or 9.52%
c. If the expectations theory of the yield curve is correct, what is the market expectation of the price that the bond will sell for next year?
- $101.37
d. Recalculate your answer to (c) if you believe in the liquidity preference theory and you believe that the liquidity premium is 1.5%.
- $102.78
Explanation:
current YTM for zero coupon bonds = 8.5% for 1 year bonds and 9.5% on 2 year bonds
The Treasury plans to issue a 2-year maturity coupon bond, paying coupons once per year with a coupon rate of 11%. The face value of the bond is $100.
bond price = PV of maturity value + PV coupons
- $100 / (1 + 9.5%)² = $83.40
- [$11 / (1 + 8.5%)] + [$11 / (1 + 9.5%)²] = $10.14 + $9.17 = $19.31
- issue price = $83.40 + $19.40 = $102.71
YTM = [C + (FV - PV)/n] / [(FV + PV)/2] = [11 + (100 - 102.71)/2] / [(100 + 102.71)/2] = 0.0952 or 9.52%
next year's price:
- $100 / (1 + 9.5%) = $91.32
- $11 / (1 + 9.5%) = $10.05
- total = 101.37
next year's price if you believe in liquidity preference theory (1.5%):
- $100 / (1 + 9.5% - 1.5%) = $92.59
- $11 / (1 + 9.5% - 1.5%) = $10.19
- total = $102.78
Answers
Answer: FASB ACS 310-10-50-2: “Receivables—Overall—Disclosure—Accounting Policies for Loans and Trade Receivables.
Explanation:
For the purposes of establishing standard frame of referencing for for items such as articles, textbooks, and other similar items, the FASB uses an 8 digit codification cititation format that works in the following way.
i. Topics — FASB ASC 310 to access the Receivables Topic
ii. Subtopics — FASB ASC 310-10 to access the Overall Subtopic of Topic 310
iii. Sections — FASB ASC 310-10-15 to access the Scope Section of Subtopic 310-10
iv. Paragraph — FASB ASC 310-10-15-2 to access paragraph 2 of Section 310-10-15"
The specific eight-digit Codification citation that describes the information about loans and trade receivables that is to be disclosed in the summary of significant accounting policies is,
FASB ACS 310-10-50-2: “Receivables—Overall—Disclosure—Accounting Policies for Loans and Trade Receivables.
The specific eight-digit codification citation should be FASB ACS 310-10-50-2.
Information of FASB:
Here FASB applied an 8 digit codification citation format that works in the following way.
i. Topics — FASB ASC 310 to access the Receivables Topic
ii. Subtopics — FASB ASC 310-10 to access the Overall Subtopic of Topic 310
iii. Sections — FASB ASC 310-10-15 to access the Scope Section of Subtopic 310-10
iv. Paragraph — FASB ASC 310-10-15-2 to access paragraph 2 of Section 310-10-15"
Learn more about receivables here: brainly.com/question/24509758
Answers
Answer:
a) 8 dollars
b) 1,640,000
2.- It should be rejected as decreases operating income to 410,000 from 1,640,000
contribution margin: $14
operating income: $ 410,000
Explanation:
68 - 60 = 8
b)
units sold x $8 contribution less fixed cost
410,000 x 8 - 1,640,000 = 1,640,000
2 contribution margin:
68 - 54 = 14
410,000 x 14 - 5,330,000 = 410,000
Step 2: Determine what the current account balance should equal.
Step 3: Record the December 31 adjusting entry to get from step 1 to step 2
Answers
Explanation:
The computation is shown below:
a. The current account balance equal to $44,400
b. The current account balance equal to
Since the company prepaid rent for two years is $44,400 but we have to compute four four months i.e from September 1 to December 31
We assume the books are closed on December 31
So, the current account balance is
= $44,400 - $7,400
= $37,000
The $7,400 is come from
= $44,400 × 4 months ÷ 24 months
= $7,400
c. And, the adjusting entry is
Rent expense A/c Dr $7,400
To Prepaid rent A/c $7,400
(Being rent expense is recorded)
Compute depreciation expense under each of the following methods. Swifty is on a calendar-year basis ending December 31.
a. Straight-line method for 2020 $enter a dollar amount.
b. Activity method (units of output) for 2020 $enter a dollar amount.
c. Activity method (working hours) for 2020 $enter a dollar amount.
d. Sum-of-the-years'-digits method for 2022 $enter a dollar amount (e) Double-declining-balance method for 2021
Answers
Answer:
a. Straight line method.
Depreciation per annum = ($ 256,800 - $12,000 ) / 8 = $ 30,600.
Depreciation for 2020 = $ 30,600 * ( 3 /12 ) = $ 7,650.
b. Units of output
Depreciation per unit = ( $ 256,800 - $ 12,000 ) / 48,000 = $ 5.1
Depreciation for 2020 = 1,000 * $ 5.1 = $ 5,100.
c. Working hours.
Depreciation per hours = ( $ 256,800 - $ 12,000 ) / 20,400 = $ 12
Depreciation for 2020 = 600 * $ 12 = $ 7,200.
D. Sum of digits method
Sum of years = 8 ( 8 +1 ) / 2 = 36.
Year - 1 used ( 3 / 12 = 0.25)
Year-2 used ( 12 / 12 = 1 )
Remaining ( 8 - 1 - 0.25 = 6.75)
Depreciation for 2022 = ($ 256,800 - $ 12,000 ) * ( 6.75 / 36 )
Depreciation for 2022 = $ 45,900.
e. Double declining balance
Depreciation rate = 200 / 8 = 25 %.
Depreciation for 2020 = $256,800 * 25 % * (3 /12)
Depreciation for 2020 = $16,050.
Depreciation for 2021 = ( $256,800 - $ 16,050) * 25%
Depreciation for 2021 = $60,188.
Answers
Answer:
Shoe manufacturers are not operating at an corporate social responsibility level.
Explanation:
Corporate social responsibility is that kind of business model which is self regulating in the nature. This is also know as corporate citizenship , according to this model company's try to operate their business in such ways that do no harm to the environment or negatively affect the society but here the motto of the company's are to enhance the society, environment , and the customer satisfaction. Company's working on this approach try to be accountable for their actions towards the consumer and society . In this question shoe manufacturers are not operating at an corporate social responsibility level.
Answer: Ethical
Explanation: The shoe manufacturers who develop and market adult-styled shoes to this group are not operating at an ethical responsibility level of the pyramid of corporate social responsibility. The ethical aspect deals with going to great extents across legal requirements to meet the expectations of society. Social responsibility is the duty of business to do no harm to society. In other words, in their daily operations, the shoe makers were not concerned about the welfare of their customers and were not mindful of how their actions affected them later on. Therefore, they weren't operating at an ethical level.