Prepare the companys consolidated accounts for x-two

Assignment Help Corporate Finance

Reference no: EM13903803

Non-autonomous foreign operation: translation issues

Ace, a South Korean electronics company, has a subsidiary, Diamond, in Puerto Grande, a Caribbean island. Diamond assembles computer hardware for sale in the region. Although Diamond keeps its accounts in doblón, the local currency, its functional currency is the South Korean won as it purchases parts and receives financing from its South Korean parent.

As a result of depressed economic conditions in the industry in x2, Diamond is forced to mark down its inventory to market value at 31 December. In addition, a year-end impairment review reveals that the recoverable amount of its plant and equipment is below the carrying amount.

(In millions of doblón) At 31 Dec x2

Inventory, at cost 30

Valuation adjustment -2

Inventory, at LOCOM 28

Plant and equipment, at cost 120

Accumulated depreciation -24

Accumulated impairment losses -15

Plant and equipment, net 81

Puerto Grande is an oil and gas producer and the doblón has strengthened against the won and other currencies in recent years as new reserves have been discovered. Key exchange rate data are given below:

Start x1 (purchase of plant and equipment)	162 won : 1 doblón
Average in Qtr 3, x2 (purchase of end-x2 inventory)	189
Average for x2	186
31 December x2	196

Required

Mae-Young, Ace's controller, is preparing the company's consolidated accounts for x2. She wants to know how to translate Diamond's fixed assets and inventory into won for consolidation purposes. Advise her.

Reference no: EM13903803

Questions Cloud

Write the equations for the these oxides : Write the equations for the these oxides when they dissolve in water: eg. oxide is SO2 Equation: SO2 (g) + H2O(l) --> H2SO3 (aq)

Show in summary form the entries bt made in its consolidated : Show in summary form the entries BT made in its consolidated accounts to record the divestment of mmO2 and adjustment of mmO2's net debt on 30 June 2001.

Show the accounting entry priore makes on frirst december : Show the accounting entry Priore makes on 1 December x5 to record the sale. (Ignore the entry recording the cost of sales.) What is the exchange gain or loss on this contract that Priore recognises in x5? In x6?

How far below earths surface would you have to dig : How far below earths surface would you have to dig to experience an acceleration due to gravity of 10.025m/sec2

Prepare the companys consolidated accounts for x-two : preparing the company's consolidated accounts for x2. She wants to know how to translate Diamond's fixed assets and inventory into won for consolidation purposes. Advise her.

Write about a hazardous materials incident : For this assignment, write about a hazardous materials incident or an environmental health and safety (EHS) project that involves a material(s) with a hazard(s) that falls under the hazard classification that we have studied so far (water/air reactiv..

Finds that the trial balance of client : Q1. An accountant finds that the trial balance of his client did not tally and it showed an excess credit of Rs. 69.74. He transferred it to a suspense account and later discovered the following errors.

How the parameters values affect the distribution : Generate the random variables (at least 10 values) [column 1], Calculate the PMF [column 21 and CDF [column 3], Plot the PMF and CDF in different graphics (It is recommended to combine the graphics while changing the parameters)

Corrupt police and court systems : Nations with corrupt police and court systems typically have lower standard of living as compared to nations with less corruption. Why might that be the case?

User Account

All Pages