Question

Translation and Remeasurement of Inventory and Cost of Sales Shopwell is a U.K. grocery chain that...

Translation and Remeasurement of Inventory and Cost of Sales

Shopwell is a U.K. grocery chain that is a subsidiary of Premium Products, a U.S. company. Premium’s fiscal year ends January 31. On February 1, 2018, Shopwell’s inventory balance consisted of £100,000 purchased when the exchange rate was $1.20/£, and £300,000 purchased when the exchange rate was $1.23/£. Shopwell made purchases of £5,000,000 evenly throughout fiscal 2019, and its inventory on January 31, 2019, consisted of £350,000 purchased when the exchange rate was $1.29/£. Shopwell’s sales of inventory occurred relatively evenly throughout fiscal 2019. The average exchange rate for fiscal 2019 was $1.26/£, and the January 31, 2019, exchange rate was $1.30/£.

Required

a. Assume that Shopwell’s functional currency is the pound. Calculate Shopwell’s translated ending inventory at January 31, 2019, and its translated cost of sales for fiscal 2019.

b. Now assume that Shopwell’s functional currency is the U.S. dollar. Calculate Shopwell’s remeasured ending inventory at January 31, 2019, and its remeasured cost of sales for fiscal 2019.

a. Translated b. Remeasured
Ending inventory $Answer $Answer
Cost of sales $Answer $Answer

Homework Answers

Answer #1

Conversion (Translation Rates) are used according to:

Assets at exchange rate at the year end Date

And Income at average rate weighted rate for sn year

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Shopwell is a U.K. grocery chain that is a subsidiary of Premium Products, a U.S. company....
Shopwell is a U.K. grocery chain that is a subsidiary of Premium Products, a U.S. company. Premium’s scal year ends January 31. On February 1, 2015, Shopwell’s inventory balance consisted of £100,000 purchased when the ex-change rate was $1.60/£, and £300,000 purchased when the exchange rate was $1.62/£. Shopwell made purchases of £5,000,000 evenly throughout scal 2016, and its inventory on January 31, 2016, consisted of £350,000 purchased when the exchange rate was $1.67/£. Shopwell’s sales of inventory occurred relatively...
Translation and Remeasurement of Depreciable Assets Massmart, the second largest retailer in Africa, is a subsidiary...
Translation and Remeasurement of Depreciable Assets Massmart, the second largest retailer in Africa, is a subsidiary of Wal-Mart Inc., a U.S. company. Massmart reports its accounts in its local currency, the rand (R). Wal-Mart’s fiscal year ends January 31. On February 1, 2018, Massmart reports facilities with original cost of R500 million and accumulated depreciation of R280 million in its noncurrent assets, as follows: • Buildings acquired at a cost of R175 million when the exchange rate was $0.15/R, with...
Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2017 with...
Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2017 with three assets: cash of 22,000 dinars, accounts receivable of 80,800 dinars, and land that cost 208,000 dinars when acquired on April 1, 2016. On January 1, 2017, Zugar has a 158,000 dinar notes payable, and no other liabilities. On May 1, 2017, Zugar renders services to a customer for 128,000 dinars, which was immediately paid in cash. On June 1, 2017, Zugar incurred a...
Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2017 with...
Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2017 with three assets: cash of 20,400 dinars, accounts receivable of 80,400 dinars, and land that cost 204,000 dinars when acquired on April 1, 2016. On January 1, 2017, Zugar has a 154,000 dinar note payable, and no other liabilities. On May 1, 2017, Zugar renders services to a customer for 124,000 dinars, which was immediately paid in cash. On June 1, 2017, Zugar incurred a...
A Belgium subsidiary's beginning and ending trial balances appear below: Dr (Cr) January 1 December 31...
A Belgium subsidiary's beginning and ending trial balances appear below: Dr (Cr) January 1 December 31 Cash, receivables € 1,500 € 1,200 Inventories 3,000 3,500 Plant & equipment, net 30,000 39,000 Liabilities (18,500) (27,200) Capital stock (4,000) (4,000) Retained earnings, beginning (12,000) (12,000) Sales revenue -- (15,000) Cost of sales 9,500 Out-of-pocket selling & administrative expenses -- 4,000 Depreciation expense -- 1,000 Total € 0 € 0 Exchange rates ($/€) are: Beginning of year $1.25 Average for year 1.22 End...
A Belgium subsidiary's beginning and ending trial balances appear below: Dr (Cr) January 1 December 31...
A Belgium subsidiary's beginning and ending trial balances appear below: Dr (Cr) January 1 December 31 Cash, receivables € 1,500 € 1,200 Inventories 3,000 3,500 Plant & equipment, net 30,000 39,000 Liabilities (18,500) (27,200) Capital stock (4,000) (4,000) Retained earnings, beginning (12,000) (12,000) Sales revenue -- (15,000) Cost of sales 9,500 Out-of-pocket selling & administrative expenses -- 4,000 Depreciation expense -- 1,000 Total € 0 € 0 Exchange rates ($/€) are: Beginning of year $1.25 Average for year 1.22 End...
Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2017 with...
Zugar Company is domiciled in a country whose currency is the dinar. Zugar begins 2017 with three assets: cash of 20,100 dinars, accounts receivable of 80,100 dinars, and land that cost 201,000 dinars when acquired on April 1, 2016. On January 1, 2017, Zugar has a 151,000 dinar note payable, and no other liabilities. On May 1, 2017, Zugar renders services to a customer for 121,000 dinars, which was immediately paid in cash. On June 1, 2017, Zugar incurred a...
Balaji Corporation of India is an 80 percent-owned subsidiary of Porter Corporation, a U.S. firm, and...
Balaji Corporation of India is an 80 percent-owned subsidiary of Porter Corporation, a U.S. firm, and its functional currency is the U.S. dollar. Balaji’s books of record are maintained in Rupee and its inventory is carried at the lower of cost or market. The current exchange rate rupees at Dec. 31, 19X8 is $.48 The historical cost of the inventory is 12,000 Rupees. The market value of the inventory is 11,000 Rupees. The historical exchange rate is $.43. The $...
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.        ...
Inventory purchase and sales data are as follows. [Note: There was no inventory before the purchase...
Inventory purchase and sales data are as follows. [Note: There was no inventory before the purchase made on January 1.] Purchased on January 1 -- 300 units, $7 cost per unit Purchased on January 16 -- 600 units, $10 cost per unit Purchased on January 25 -- 400 units, $9 cost per unit Sold on January 31 -- 500 units, $15 selling price per unit Assume that the company uses LIFO. Compute ENDING INVENTORY for January. Write the dollar amount...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT