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Question;23. Dover Company owns 90% of the capital stock of a;foreign subsidiary located in Italy. Dover's accountant has just translated the;accounts of the foreign subsidiary and determined that a debit translation;adjustment of $80,000 exists. If Dover uses the equity method for its investment;what entry should Dover record in order to recognize the translation;adjustment?;A. Option A;B. Option B;C. Option C;D. Option D;24. For each of the items listed below, state whether;they increase or decrease the balance in cumulative translation adjustments;(assuming a credit balance at the beginning of the year) when the foreign;currency strengthened relative to the U.S. dollar during the year.;A. Option A;B. Option B;C. Option C;D. Option D;25. Nichols Company owns 90% of the capital stock of a;foreign subsidiary located in Ireland. As a result of translating the;subsidiary's accounts, a debit of $160,000 was needed in the translation;adjustments account so that the foreign subsidiary's debits and credits were;equal in U.S. dollars. How should Nichols report its translation adjustments on;its consolidated financial statements?;A. As a $144,000 increase in the stockholders' equity section of the;balance sheet.;B. As a $144,000 reduction in consolidated comprehensive net income.;C. As a $160,000 debit in stockholders' equity section of the balance;sheet.;D. As a $160,000 reduction in consolidated comprehensive net income.;26. Under the temporal method, which of the following;is usually used to translate monetary amounts to the functional currency?;I. The current exchange rate;II The historical exchange rate;III. Average exchange rate;A. I;B. III;C. II;D. Either I or II;27. Refer the information provided above. Assuming the;U.S. dollar is the functional currency, what is the amount of Mercury's cost of;goods sold remeasured in U.S. dollars?;A. $1,680;B. $1,712;C. $1,700;D. $1,692;28. Based on the preceding information, the;translation of cost of goods sold for 2008, assuming that the Spanish peseta is;the functional currency is;A. $1,700.;B. $1,760.;C. $1,680.;D. $1,692.

 

Paper#44962 | Written in 18-Jul-2015

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