Question

HiTech, Inc. is a U.S. firm with a Mexican subsidiary. The subsidiary reports that its balance...

HiTech, Inc. is a U.S. firm with a Mexican subsidiary. The subsidiary reports that its balance sheet shows the following items:

Cash 5,000 pesos

Short term securities at market 3,000

Accounts receivable 1,000

Inventories at cost 3,000

Net plant 3,000

Current liabilities 5,000

Long‑term debt 4,000.

The current rate is 30 Mexican Pesos=US$1.

Assume that the historical rate is 20 pesos per dollar. What is the translation exposure according to the current, current/non‑current, monetary/non‑monetary, and temporal methods?

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Tranlation esposure under Current / Non Current method:

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
When translating foreign currency financial statements for a company whose functional currency is the U.S. dollar,...
When translating foreign currency financial statements for a company whose functional currency is the U.S. dollar, which of the following accounts is translated using historical exchange rates?                   Notes Payable            Equipment a.           Yes                          Yes b.           Yes                          No c.            No                           No d.           No                          Yes 2.         Under the temporal method, monetary assets and liabilities are translated by using the exchange rate existing at the: a.   beginning of the current year. b.   date the transaction occurred. c.   balance sheet date. d.   None of these. 3.        ...
Charles Edward Company established a subsidiary in a foreign country on January 1, 2016, by investing...
Charles Edward Company established a subsidiary in a foreign country on January 1, 2016, by investing FC 3,200,000 when the exchange rate was FC 3.5 to one U.S. dollar. No income was earned and no dividends were paid during that year, nor the next. In 2018, Charles Edward negotiated a bank loan of FC 1,000,000 on January 5, and purchased plant and equipment in the amount of FC 4,800,000 on January 8, 2018. No dividends were paid during 2018. Additional...
The balance sheet and income statement shown below are for Koski Inc. Note that the firm...
The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $)   Assets      2018 Cash and securities      $3,000 Accounts receivable      15,000 Inventories      18,000 Total current assets      $36,000 Net plant and equipment      $24,000 Total assets     ...
The balance sheet and income statement shown below are for Koski Inc. Note that the firm...
The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets 2019 Cash and securities $4,200 Accounts receivable 17,500 Inventories 20,300 Total current assets $42,000 Net plant and equipment $28,000 Total assets $70,000 Liabilities and Equity Accounts payable $27,531...
The balance sheet and income statement shown below are for Koski Inc. Note that the firm...
The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets 2016 Cash and securities $2,145 Accounts receivable 8,970 Inventories 12,480 Total current assets $23,595 Net plant and equipment $15,405 Total assets $39,000 Liabilities and Equity Accounts payable $7,410...
The balance sheet and income statement shown below are for Koski Inc. Note that the firm...
The balance sheet and income statement shown below are for Koski Inc. Note that the firm has no amortization charges, it does not lease any assets, none of its debt must be retired during the next 5 years, and the notes payable will be rolled over. Balance Sheet (Millions of $) Assets 2016 Cash and securities $2,145 Accounts receivable 8,970 Inventories 12,480 Total current assets $23,595 Net plant and equipment $15,405 Total assets $39,000 Liabilities and Equity Accounts payable $7,410...
Charles Edward Company established a subsidiary in a foreign country on January 1, 2016, by investing...
Charles Edward Company established a subsidiary in a foreign country on January 1, 2016, by investing FC 3,200,000 when the exchange rate was FC 3.5 to one U.S. dollar. No income was earned and no dividends were paid during that year, nor the next. In 2018, Charles Edward negotiated a bank loan of FC 1,000,000 on January 5, and purchased plant and equipment in the amount of FC 4,800,000 on January 8, 2018. No dividends were paid during 2018. Additional...
The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for...
The following table shows an abbreviated income statement and balance sheet for Quick Burger Corporation for 2016. INCOME STATEMENT OF QUICK BURGER CORP., 2016 (Figures in $ millions) Net sales $ 27,584 Costs 17,586 Depreciation 1,419 Earnings before interest and taxes (EBIT) $ 8,579 Interest expense 534 Pretax income 8,045 Taxes 2,816 Net income $ 5,229 BALANCE SHEET OF QUICK BURGER CORP., 2016 (Figures in $ millions)   Assets 2016 2015 Liabilities and Shareholders' Equity 2016 2015 Current assets Current liabilities...
Financial information at 30 June 2020 of Great Ltd and its subsidiary company, Wall Ltd, is...
Financial information at 30 June 2020 of Great Ltd and its subsidiary company, Wall Ltd, is shown below. At 1 July 2017, the date Great Ltd acquired its 80% shareholding in Wall Ltd, all the identifiable assets and liabilities of Wall Ltd were at fair value except for the following assets: Carrying amount Fair value Plant (cost $75,000) $49,000 $55,000 Land 29,000 37,000 The plant has an expected life of 10 years, with benefits being received evenly over that period....
The 2013 balance sheet of the Captain Jet Inc. is attached. During 2014, the following events...
The 2013 balance sheet of the Captain Jet Inc. is attached. During 2014, the following events occurred. 1. On January 10, sell merchandise on account to Rayms $9,600 and Fischer $8,800. Terms 2/10, n/30. Freight $100 for each sale, F.O.B. shipping point. 2. On January 12, purchase merchandise on account from Zapfel $3,000 and Liotta $2,400. Terms 1/10, n/30. Freight $120 for each sale, F.O.B. destination. 3. Receive checks, $4,000 from Longhini and $2,000 from Hall, for sales on account...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT