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Remeasurement Gain or Loss Refer to the information given in Problem P12 17 and your answer to part a of Problem P12-18 Required Prepare a schedule providing a proof of the

Remeasurement Gain or Loss Refer to the information given in Problem P12 17 and your answer to part a of Problem P12-18 Required Prepare a schedule providing a proof of the

Remeasurement Gain or Loss

Refer to the information given in Problem P12-17 and your answer to part a of Problem P12-18.

Required

Prepare a schedule providing a proof of the remeasurement gain or loss. For this part of the problem, assume that the Norwegian subsidiary had the following monetary assets and liabilities at January 1, 20X5:

Monetary Assets

Cash

NKr 10,000

Accounts Receivable (net)

140,000

 

Monetary Liabilities

Accounts Payable

NKr 70,000

Notes Payable

140,000

On January 1, 20X5, the Norwegian subsidiary has a net monetary liability position of NKr60,000.

P12-17:

Additional Information

1. Vikix uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20X4, and ending inventory was acquired on December 15, 20X5. Purchases of NKr420,000 were made evenly throughout 20X5.

2. Vikix acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation.

3. Vikix’s sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5.

4. The dividends were declared and paid on July 1, 20X5.

5. Taft’s income from its own operations was $275,000 for 20X5, and its total stockholders’ equity on January 1, 20X5, was $3,500,000. Taft declared $100,000 of dividends during 20X5.

6. Exchange rates were as follows:

 

NKr

$

July 1, 20X3

1 =

 0.15

December 30, 20X4

1 =

 0.18

January 1, 20X5

1 =

 0.18

July 1, 20X5

1 =

 0.19

December 15, 20X5

1 =

 0.205

December 31, 20X5

1 =

 0.21

Average for 20X5

1 =

 0.20

Tripti 09-Jul-2020

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