Graded Homework

63. Calculate the amount allocated to the patent at
January 1, 2004.

A) $50,000.

B) $35,000.

C) $34,000.

D) $32,500.

E) $28,200.

64. Amortization
of the patent for 2004 would be

A) $ 7,000.

B) $10,000.

C) $ 6,800.

D) $ 9,000.

E) $ 6,500.

65. Compute
the amount of the patent reported on the consolidated balance sheet at December
31, 2004.

A) $28,200.

B) 428,000.

C) $35,000.

D) $27,200.

E) $26,000.

66. Kennedy’s
share of Hastie’s net income for 2004 would be

A) $18,000.

B) $15,000.

C) $18,200.

D) $16,000.

E) $18,500.

67. Assuming
the translation adjustment from translating Hastie’s 2004 financial statements
was $12,000 debit, the cumulative translation adjustment reported on the
December 31, 2004 consolidated balance sheet of Kennedy would be

A) $14,200.

B) $ 9,800.

C) $12,000.

D) $18,800.

E) $ 5,200.

Use
the following to answer question 68-80:

Quadros
Inc., a Portugese firm was acquired by a U.S. company on January 1, 2004. Selected account balances are available for
the year ended December 31, 2005, and are stated in euro, the local currency.

Sales	€400,000
Inventory (bought on February 1, 2005)	20,000
Equipment (bought on January 1, 2004)	90,000
Dividends (paid on September 1, 2005)	20,000
Accumulated depreciation – equipment	45,000
Depreciation expense – equipment	9,000
Relevant exchange rates are given below:
January 1, 2004	$ .91
January 1, 2005	.93
February 1, 2005	.94
September 1, 2005	.97
December 31, 2005	1.01
4th quarter average, 2004	.90
4th quarter average, 2005	.98
Average, 2005	.95

68. Assume
the functional currency is the euro, compute the restated amount for sales for
2005.

A) $364,000.

B) $372,000.

C) $380,000.

D) $360,000.

E) $404,000.

69. Assume
the functional currency is the euro, compute the restated amount for inventory
for 2005.

A) $18,600.

B) $19,600.

C) $18,000.

D) $20,200

E) $19,000.

70. Assume
the functional currency is the euro, compute the restated amount for equipment
for 2005.

A) $81,900.

B) $90,900.

C) $83,700.

D) $88,200.

E) $85,500.

71. Assume
the functional currency is the euro, compute the restated amount for dividends
for 2005.

A) $19,000.

B) $20,200.

C) $18,600.

D) $19,400.

E) $19,600.

72. Assume
the functional currency is the euro, compute the restated amount for
accumulated depreciation for 2005.

A) $40,950.

B) $41,850.

C) $45,450.

D) $42,750.

E) $44,100.

73. Assume
the functional currency is the euro, compute the restated amount for
depreciation expense for 2005.

A) $8,190.

B) $8,370.

C) $8,820.

D) $9,090.

E) $8,550.

74. Assume
the functional currency is the U.S. dollar, compute the restated amount for
sales for 2005.

A) $364,000.

B) $372,000.

C) $380,000.

D) $360,000.

E) $404,000.

75. Assume
the functional currency is the U.S. dollar, compute the restated amount for
inventory for 2005.

A) $18,600.

B) $19,600.

C) $18,000.

D) $20,200

E) $19,000.

76. Assume
the functional currency is the U.S. dollar, compute the restated amount for
equipment for 2005.

A) $81,900.

B) $90,900.

C) $83,700.

D) $88,200.

E) $85,500.

77. Assume
the functional currency is the U.S. dollar, compute the restated amount for
dividends for 2005.

A) $19,000.

B) $20,200.

C) $18,600.

D) $19,400.

E) $19,600.

78. Assume
the functional currency is the U.S. dollar, compute the restated amount for
accumulated depreciation for 2005.

A) $40,950.

B) $41,850.

C) $45,450.

D) $42,750.

E) $44,100.

79. Assume
the functional currency is the U.S. dollar, compute the restated amount for
depreciation expense for 2005.

A) $8,190.

B) $8,370.

C) $8,820.

D) $9,090.

E) $8,550.

80. When
translating Quadros’ financial statements, which of the following statements is
true?

A) There
will be a remeasurement gain reported on the consolidated income statement.

B) There
will be a remeasurement loss reported on the consolidated income statement.

C) There
will be a positive cumulative translation adjustment reported on the consolidated balance sheet.

D) There
will be a positive cumulative translation adjustment reported on the consolidated income
statement.

E) There
will be a transaction gain reported on the consolidated income statement.

Matching Question

81. A
foreign subsidiary was purchased on January 1, 2004. Determine the exchange rate used to restate
the following accounts at December 31, 2004. Land was purchased on October 1,
2004. Relevant exchange rates follow:

A) January
1, 2004

B) October
1, 2004

C) December
31, 2004

D) Average,
2004

E) None
of the above.

Identify the exchange rate
used to translate items 1-5:

____ 1. Land.

____ 2. Equipment.

____ 3. Bonds payable.

____ 4. Common stock.

____ 5. Retained earnings.

Identify the exchange rate
used to remeasure the items 6-10:

____ 6. Land.

____ 7. Equipment.

____ 8. Bonds payable.

____ 9. Common stock.

____ 10. Retained earnings.