Reference no: EM132785417
Daisy Co. Owns a subsidiary in a foreign country whose trial balance in foreign currency unit (FCU) for the last two years follow:
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December 31, 2018
(in FCU)
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December 31,2019
(in FCU)
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DEBITS
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Cash
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100,000
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80,000
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Receivables
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450,000
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550,000
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Inventory
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680,000
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720,000
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Property and equipment (net)
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1,000,000
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900,000
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Cost of goods sold
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300,000
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270,000
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Operating Expenses
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25,000
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50,000
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Miscellaneous Expenses
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5,000
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25,000
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Dividends
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-
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5,000
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TOTAL
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2.560.000
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2.600.000
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CREDITS
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Short-term debts
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260,000
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340,000
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Long-term debts
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1,250,000
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1,100,000
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Common Stock
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500,000
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500,000
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Retained Earnings, 1/1
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-
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220,000
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Sales
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500,000
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400,000
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Interest Income
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50,000
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40,000
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TOTAL
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2.560.000
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2.600.000
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Daisy formed the subsidiary on January 1, 2018 when the exchange rated was P30 for 1FCU. The exchange rate for 1FCU on December 31, 2018 had increased to P35 and to P40 on December 31, 2019. Average rate during 2019 is P36. Income is earned evenly over the year. The subsidiary declared and paid dividends on September 1, 2019. The exchange rate on this date was P38 for 1FCU. The subsidiary's functional currency is the foreign currency unit (FCU). The foreign country is a non-hyperinflationary economy.
Question 1. How much is the total assets of the subsidiary as of December 31, 2018 translated in Philippine Peso?
Question 2. How much is the translation adjustment-OCI on December 31, 2018
Question 3. How much is the retained earnings as of December 31, 2019 translated in Philippine Peso?
Question 4. How much is the translation adjustment-OCI for the year 2019?
Question 5. How much is the cumulative translation adjustment-OCI on December 31, 2019?
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