Solution-Where would these translation gains or losses show

Where would these translation gains or losses show up

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Reference no: EM13508581

Halon Norway, the Norwegian subsidiary of a U.S. company, Halon, Inc., has the following balance sheet:

Assets (NKr thousands)	Liabilities (NKr thousands)
Cash, marketable securities	7,000	Accounts payable	14,000
Accounts receivable	18,000	Short-term debt	8,000
Inventory	31,000	Long-term debt	45,000
Net fixed assets	63,000	Equity	52,000
	NKr119,000		NKr119,000

a. At the current spot rate of $0.21/NKr, calculate Halon Norway's accounting exposure under the current/noncurrent, monetary/nonmonetary, temporal, and current rate methods.

b. Suppose the Norwegian krone depreciates to $0.17. Produce balance sheets for Halon Norway at the new exchange rate under each of the four alternative translation methods.

c. Relate these gains and losses to the exposure calculations performed in part (a) combined with the exchange rate change. Where would these translation gains or losses show up in the balance sheets prepared for part (b)?

Reference no: EM13508581

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Where would these translation gains or losses show up

Reference no: EM13508581

Reference no: EM13508581

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