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Sunsquare Company was created as a wholly owned subsidiary of Times Corporation (a US based company) on J On that date, Times Corporation invested USD50,000 in Sunsquare's capital stock. Given the exchange rate on tha Sunsquare's Balance sheet at Jan 1, 2021 in Won as follows: Balance sheet at Jan 1, 2021 Won Cash 70,000, Total assets 70,000, Capital stock 70,000, Total liabilities and equity 70,000, Relevant USD exchange rates for the Won for 2021 are as follows: January 1, 2021 1400 Won/USD Average for 2021 1420 Won/USD 1410 Won/USD 1415 Won/USD 1425 Won/USD Average for the month of December 2021 1430 Won/USD December 31, 2021 1440 Won/USD Sunsquare's Won denominated financial statements for the year ended December 31, 2021 are as follows: Income statement for 2021 Won Exchange rate Sales 55,000,000 1, COGS (30,000,000) 1, Selling and administrative expenses (11,000,000) 1, Depreciation expense (1,000,000) 1, Interest expense (2,000,000) 1, Income before tax 11,000,000 Calculation Income taxes (2,200,000) 1, Net income 8,800,000 Calculation Statement of Retained Earnings for 2021 Won Exchange rate Retained earnings, 1/1/2021 0 0 Add: Net income 8,800,000 From Income statement Less: Dividend (4000000) 1425 Retained earnings, 31/12/2021 4,800,000 Calculation Balance sheet at Dec 31, 2021 Won Exchange rate Rate when PPE were acquired and long- term debt was incurred on Jan 10, 2021 Rate when capital was increased Feb 25, 2021 Rate when dividends were declared. Dec 1, 2021
Cash 30,000,000 1440 Account receivable 15,000,000 1440 Inventory 21,000,000 1440 PPP 55,000,000 1440 Accumulated depreciation (1,200,000) 1440 Total assets 119,800,000 Calculation Account payable 10,000,000 1440 Long-term debt 5,000,000 1440 Capital stock 100,000,000 Calculation (1) RE 4,800,000 From RE statement Cumulative translation adjustment Calculation Total Liabilties and Equity 119,800,000 Equal Total assets Additional information: (1) Inventory is carried at FIFO cost. Opening inventory was purchased on Jan 1, 2021. Ending inventory was acq (2) 30.000.000 Won additional capital was raised on Feb 25, 2020 Require: Translate the financial statements a. Current rate method b. Temporal method
Current rate Dec 31,2021 20,833.33 (1) Capital stock calculation
- Current rate Dec 31,2021 10,416. - Current rate Dec 31,2021 14,583. - Current rate Dec 31,2021 38,194.44 Jan- - Current rate Dec 31,2021 (833.33) Feb- - 83,194. - Current rate Dec 31,2021 6,944. - Current rate Dec 31,2021 3,472.
- culation (1) 71,201.
- m RE statement 3390.
- al Total assets 83,194. (1813.80)
Capital stock calculation Won Exchange rate USD 70,000,000 1400 Historical rate Jan 1 50, 30,000,000 1415 Historical rate Feb 25 21, 71,
Sunsquare Company was created as a wholly owned subsidiary of Times Corporation (a US based company) on J On that date, Times Corporation invested USD50,000 in Sunsquare's capital stock. Given the exchange rate on tha Sunsquare's Balance sheet at Jan 1, 2021 in Won as follows: Balance sheet at Jan 1, 2021 Won Cash 70,000, Total assets 70,000, Capital stock 70,000, Total liabilities and equity 70,000, Relevant USD exchange rates for the Won for 2021 are as follows: January 1, 2021 1400 Won/USD Average for 2021 1420 Won/USD 1410 Won/USD 1415 Won/USD 1425 Won/USD Average for the month of December 2021 1430 Won/USD December 31, 2021 1440 Won/USD Sunsquare's Won denominated financial statements for the year ended December 31, 2021 are as follows: Balance sheet at Dec 31, 2021 Won Exchange rate Cash 30,000,000 1440 Account receivable 15,000,000 1440 Inventory (ending) 21,000,000 1430 PPE 55,000,000 1410 Accumulated depreciation (1,200,000) 1410 Total assets 119,800, Account payable 10,000,000 1440 Long-term debt 5,000,000 1440 Capital stock 100,000,000 Calculation (1) RE 4,800,000 Calculation Total Liabilties and Equity 119,800,000 Equals total assets Statement of Retained Earnings for 2021 Won Exchange rate Retained earnings, 1/1/2021 0 0 Add: Net income 8,800,000 Calculation Less: Dividend (4000000) 1425 Rate when PPE were acquired and long- term debt was incurred on Jan 10, 2021 Rate when capital was increased Feb 25, 2021 Rate when dividends were declared. Dec 1, 2021
Corporation (a US based company) on January 1, 2021. ital stock. Given the exchange rate on that date of 1400 Won per USD. Temporal method: Translation adjustment go to P/L Step 1: Balance sheet Step 2: RE statement Step 3: Income statement (translation adjustment gain/loss) ecember 31, 2021 are as follows: xchange rate USD (1) Capital stock calculation Current rate Dec 31,2021 20,833. Current rate Dec 31,2021 10,416. Average rate month Dec 2021 14,685.31 Jan- Rate when acquire PPE 39,007.09 Feb- Rate when acquire PPE (851.06) 84,091. Current rate Dec 31,2021 6,944. Current rate Dec 31,2021 3,472. alculation (1) 71, 2,473. quals total assets 84,091. xchange rate USD 0 5,280. Rate when declare dividend (2807)
rom Balance sheet 2,473. xchange rate USD (2) calculation COGS Average rate for 2021 38,732.39 Won
alculation (2) (21,230.18) Opening inventor^0
Average rate for 2021 (7,746.48) Add: Purchase^ 51,000,
Rate when acquire PPE (709.22) Less: End invento^ 21,000,
Average rate for 2021 (1,408.45) COGS^ 30,000,
Average rate for 2021 (1,549.30) (808.49) - 808. rom RE statement 5,280. on Jan 1, 2021. Ending inventory was acquired evenly throughout the month of December.
