Reference no: EM133749335

Discussion Post: Accounting

I. Foreign Currency Transactions and Translation:

ABC Corp. operates internationally and has transactions denominated in various currencies. During the year, the company had the following transactions:

1) Purchased goods from a foreign supplier for 100,000 euros when the exchange rate was $1.15 per euro.
2) Paid a foreign contractor 50,000 British pounds when the exchange rate was $1.30 per pound.

At the end of the year, the exchange rates are $1.10 per euro and $1.25 per pound. Calculate the gain or loss on foreign currency transactions and the cumulative translation adjustment for the year.

II. Budgeting and Variance Analysis:

XYZ Corp. prepared a budget for the production of 10,000 units. The budgeted cost per unit is $50 for direct materials, $30 for direct labor, and $20 for variable overhead. Actual production for the month was 12,000 units, and the actual costs were $55 for direct materials, $35 for direct labor, and $25 for variable overhead.

Calculate the following variances:

1) Direct Materials Price Variance and Quantity Variance
2) Direct Labor Rate Variance and Efficiency Variance
3) Variable Overhead Spending Variance and Efficiency Variance

III. Lease Accounting under IFRS 16:

A company enters into a lease agreement for equipment with an annual lease payment of $50,000 for 5 years. The implicit rate in the lease is 6%, and the incremental borrowing rate is 8%. Calculate the present value of lease payments, the interest expense for the first year, and the lease liability at the end of the first year.