Reference no: EM132958183

On Jan.1, 2019, TEL acquired 70% voting shares of HEA which is operating in the U.S. On the acquisition day, only its equipment with a remaining useful life of 10 years was undervalued by 4,000.

Assume the spot rates given under A (this rate should be used), also assume the average exchange rate is 1.2, the rate on the day year-end inventory was purchased is 1.12, the rate on the day when dividends are declared is 1.19.

Problem 1: What is the translated amortization of the acquisition differential under FCT method for the consolidated income statement for the year of 2019?

Problem 2: What is the translated amortization of the acquisition differential under PCT method for the consolidated income statement for the year of 2019?

Problem 3: What is the difference in gain or loss from the translation of the acquisition differential amortization between PCT and FCT method?

Problem 4: What is the difference in the translated unamortized acquisition differential between PCT and FCT as of Dec 31, 2019?

Problem 5: What is the difference in the exchange rate that is used to translate year-end inventories between PCT and FCT??

Problem 6: State how gain or loss from translating net position of balance sheet is reported.