Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on december 18, 2020, stephanie corporation acquir

On December 18, 2020, Stephanie Corporation acquired 100 percent of a Swiss company for 4.012...

60.1K

Verified Solution

Question

Accounting

image

On December 18, 2020, Stephanie Corporation acquired 100 percent of a Swiss company for 4.012 million Swiss francs (CHF), which is indicative of book and fair value. At the acquisition date, the exchange rate was $1.00 = CHF 1. On December 18, 2020, the book and fair values of the subsidiary's assets and liabilities were as follows: Cash Inventory Property, plant, and equipment Notes payable CHF 812,000 1,312,000 4,012,000 (2,124,000) Stephanie prepares consolidated financial statements on December 31, 2020. By that date, the Swiss franc has appreciated to $1.10 = CHF 1. Because of the year-end holidays, no transactions took place prior to consolidation. a. Determine the translation adjustment to be reported on Stephanie's December 31, 2020, consolidated balance sheet, assuming that the Swiss franc is the Swiss subsidiary's functional currency. What is the economic relevance of this translation adjustment? b. Determine the remeasurement gain or loss to be reported in Stephanie's 2020 consolidated net income, assuming that the U.S. dollar is the functional currency. What is the economic relevance of this remeasurement gain or loss? a. Translation adjustment b

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Statistics
1.2K views

Refer to the gasoline sales time series data in the given table. Week Sales (1,000s of gallons) 1 17 2 21 3 16 4 24 5 17 6 18 7 22 8 20 9 21 10 19 11 16 12 25 (a) Compute four-week...

Advance Math
1.2K views

(Discrete Math) Prove that the equation 2x² + y² = 14 has no positive integer solutions.

General Management
1.2K views

4. "The first duty of business is to survive and guiding the principle of business economics...

General Management
1.2K views

For the following linear programming problem:    Maximize z = 2x1+ x2    Such that      x1+ 2x2...

Physics
1.2K views

lock A of mass MA 1 kg is kept on a frictionless horizontal surface and...

Geometry
1.2K views

n 6 7 Rationalize the denominator answer in simplest radical form 3 5 7 6...

Basic Math
1.2K views

Nicole took a taxi from her house to the airport. The taxi company charged a...

Algebra
1.2K views

Find the first term of the arithmetic sequence with a6 = 2.7 and a7 Find...

Algebra
1.2K views

Simplify the radical expression. ?75?37.55?36?3?25

Algebra
1.2K views

1 2 7270 3 1 y x y 9 8 7 654 Does the function...

Accounting
1.2K views

High Desert Potteryworks makes a variety of pottery products that it sells to retailers, such...

Accounting
1.2K views

Mel Ltd has reported an accounting/net profit before income tax for the year ended 30...