The Trial Balance of the Paris Branch of Cisalpine Company on Dec 31, 200X is pr
ID: 2498266 • Letter: T
Question
The Trial Balance of the Paris Branch of Cisalpine Company on Dec 31, 200X is presented below:
Balance in Euros
Cash 300,000
Inventory 120,000
Common Stock (400,000)
Retained Earnings ( 7,000)
Sales (120,000)
Cost of Goods Sold 85,000
Operating expenses 22,000
Conversion rates:
Current One Euro = $1.08
Average One Euro = $1.07
Historic One Euro = $1.06
US Dollars are the functional and reporting currency.
Complete the remeasurement of the Paris Branch to US dollars (the functional currency) on December 31, 200X.
Explanation / Answer
Euro USD Cash 300000 Current rate 1.08 324000 Inventory 120000 Current rate 1.08 129600 Common stock -400000 Historic rate 1.06 -424000 Retained Earnings ( Refer note below) -7000 -21330 Sales -120000 Average rate 1.07 -128400 Cost of good sold 85000 Average rate 1.07 90950 Operating Expenses 22000 Average rate 1.07 23540 Translation Adjustment 5640 Closing Balance Retained Earning opening retained earnings -7000 Historic rate 1.06 -7420 Add :translated Sales -128400 Less : translated Cost of goods sold 90950 Less : translated operating costs 23540 Retained earning balance -21330
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