Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

USE THE FOLLOWING FOR THE NEXT 2 PROBLEMS Munich Bratwerst Company balance sheet

ID: 2716877 • Letter: U

Question

USE THE FOLLOWING FOR THE NEXT 2 PROBLEMS

Munich Bratwerst Company

balance sheet

income statement

31-Dec 2016

in EU's

for the year 2016

Cash

10,000

sales

1,500,000

Accts rec

40,000

cogs

800,000

inventory

50,000

gross pro

700,000

equip net

100,000

land

400,000

deprec exp

100,000

oper exp

510,000

tot asset

600,000

net income

90,000

accts pay

50,000

dividends of 40,000 eu paid 6/30 when 2eu=$1

comm st

400,000

december 31, 2016 4eu =$1

average 2016 3 eu =$1

ret earn

150,000

June 1 1998 when stock acquired 1eu =$1

October 1, 1998 when equip purchased 1.5eu =$1

December 31, 2000 when land purchased 2eu=$1

retained earnings 1-1-16 $68,000

PREPARE A DOLLAR DENOMINATED: INCOME STATEMENT, BALANCE SHEET AND STATEMENT OF EQUITY IF THE DOLLAR IS THE FUNCTIONAL CURRENCY (TEMPORAL METHOD)

PREPARE A DOLLAR DENOMINATED: INCOME STATEMENT, BALANCE SHEET AND STATEMENT OF EQUITY IF THE EURO IS THE FUNCTIONAL CURRENCY (CURRENT RATE METHOD)

Munich Bratwerst Company

balance sheet

income statement

31-Dec 2016

in EU's

for the year 2016

Cash

10,000

sales

1,500,000

Accts rec

40,000

cogs

800,000

inventory

50,000

gross pro

700,000

equip net

100,000

land

400,000

deprec exp

100,000

oper exp

510,000

tot asset

600,000

net income

90,000

accts pay

50,000

dividends of 40,000 eu paid 6/30 when 2eu=$1

comm st

400,000

december 31, 2016 4eu =$1

average 2016 3 eu =$1

ret earn

150,000

June 1 1998 when stock acquired 1eu =$1

October 1, 1998 when equip purchased 1.5eu =$1

December 31, 2000 when land purchased 2eu=$1

retained earnings 1-1-16 $68,000

Explanation / Answer

Dollar Denominated:

Income statement (by using Average Rate 3eu=$1)

sales (1500000 * 3eu) $4500000

Less: COGS(800000 * 3eu) $2400000

Gross Profit $2100000

Less: Depreciation(100000*3eu) $300000

Less:Other Expenses(510000*3eu) $1530000

Net Income       $270000   

Balance Sheet (by using Closing Rate 4eu=$1)

Munich Bratwerst Company

$

  Assets

  Cash(10000 * 4eu) 40000

Accounts Receivable(40000*4eu) 160000

Inventories(50000*4eu) 200000

Equipment (100000*4eu) 400000

Land (400000 * 4eu) 1600000

Total Assets 2400000

   Liabiliites

Account payable(50000 *4eu) 200000

Common Stock (400000*4eu) 1600000

Retained Earning(150000*4eu) 600000

Total Liabilities    2400000