Reference no: EM132725829

Eni is domiciled in a country whose currency is the euro. Eni begins 2020 with three assets: cash of 20,300 euros, accounts receivable of 80,300 euros, and land that cost 203,000 euros when acquired on April 1, 2019. On January 1, 2020, Eni has a 153,000 euro note payable, and no other liabilities. On May 1, 2020, Eni renders services to a customer for 123,000 euros, which was immediately paid in cash. On June 1, 2020, Eni incurred a 103,000 euro operating expense, which was immediately paid in cash. No other transactions occurred during the year. Currency exchange rates for 1 euro follow:

April 1, 2019$0.36=1 euro

January 1, 20200.39=1

May 1, 20200.40=1

June 1, 20200.42=1

December 31, 20200.44=1

Problem 1: Assume that Eni is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the euro is the subsidiary's functional currency. What is the translation adjustment for this subsidiary for the year 2020?

Problem 2: Assume that Eni is a foreign subsidiary of a U.S. multinational company that uses the U.S. dollar as its reporting currency. Assume also that the U.S. dollar is the subsidiary's functional currency. What is the remeasurement gain or loss for 2020?

Problem 3: Assume that Eni is a foreign subsidiary of a U.S. multinational company. On the December 31, 2020, balance sheet, what is the translated value of the Land account? On the December 31, 2020, balance sheet, what is the remeasured value of the Land account?