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k0ka [10]
3 years ago
9

An U.S. MNC translates the balance sheet and income statement of a French subsidiary, which keeps its books in euro, into U.S. d

ollars using the money/non-monetary method. The reporting currency is US dollar. The subsidiary is at the end of its first year of operation. The historical exchange rate is $1.60/€1.00 and the most recent exchange rate is $1.80/€ What is the value of inventory in $? Balance Sheet Cash € 2,500 Inventory (current Value = €1,800) € 1,500 Net fixed assets € 4,200 Total Assets € 8,200 Current liabilities € 1,200 Long-term Debts € 2,200 Common stock € 2,700 Retained earnings € 2,100 CTA Total L&E € 8,200 Income Statement Sales Revenue € 12,000 COGS € 7,500 Depreciation € 1,000 NOI € 3,500 Tax(40%) € 1,400 Profit after tax € 2,100 Foreign Exchange gain (loss) Net income € 2,100 Dividends 0 Addition to Retained Earnings € 2,100 Multiple Choice $2,400 $1,506 $2,750 None of the above $2,078
Business
1 answer:
uysha [10]3 years ago
8 0

Answer:

The answer is $2,880 or None of the above in the multiple choices

Explanation:

The money/non-monetary method means that monetary items (e.g. cash, accounts payable and receivable, and long-term debt) are translated at the current rate while non-monetary items (e.g. inventory, fixed assets, and long-term investments) are translated at historical rates.

Therefore, the value of inventory in $ is translated at the historical rate as follows:

Inventory's current value x historical rate = €1,800  x $1.60/€1.00 = $2,880

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A manufacturer of washing machines has expanded its plant and has created excess capacity, just as the general economy has taken
Lostsunrise [7]

Answer:

. b. offer rebates and incentives for customers who purchase washing machines.

Explanation:

Increasing the productive structure of a firm must be carefully planned. There needs to be demand and take into account the expectations of the economy. When a company increases its structure over an inadequate period, the strategy can be fatal, as firms typically go to great lengths to make investments. In the case described, the company now has an idle capacity, ie does not use all its productive infrastructure. This is compounded by the moment of narrated economic crisis. In this situation, the company is most likely to promote price incentives through discounts to stimulate demand for washing machines. Thus, the employer gets a breath to maintain its activities until the economy recovers and she can use all the installed capacity.

8 0
2 years ago
RE: Subaru While Japanese Yen sharply appreciated against US$, Subaru continued to manufacture most of their cars in Japan, then
Helen [10]

Answer:

Yen depreciated its value against US$

Explanation:

The reason was that the Japanese government has a free trade agreement with the United States and what happened was that the Yen appreciated against Dollars by which the Japanese companies might had suffered as the american products would have been imported more to the country because now they are cheaper than the Japanese cars, as a result the industry in the Japan would had suffered. So the government of japan set 115 Yen as apposed to 85 Yen against each dollars which resulted in increase in the demand of the manufacturing of the cars. Now the Japanese products were greater in demand because of they cost less. And at the year end 2015, the Sabaru reported $2 billion profit despite the fact that 80% of its production was in Japan. The american auto suffered loss of market by $2 Billion.

3 0
3 years ago
The following is an excerpt from Walmart's 2015 Form 10-K A summary of the provision for income taxes is as follows ($ millions)
REY [17]

Answer:

a. The mount of income tax expense does Walmart report in its income statement for 2015 was $8,074

b. The amount of Walmart's income tax expense that was determined from the company's tax returns is $8,615

c. Deferred taxes decreased Walmart's income tax provision for the year

Explanation:

a. In order to calculate what amount of income tax expenses does Walmart report in its income statement for 2015, we would have to use the following formula:

Income tax expenses= Current year income taxes + Deferred tax expense

Income tax expenses=$8,615-$541

Income tax expenses=$8,074

b. The amount of Walmart's income tax expense that was determined from the company's tax returns is $8,615. This are the Total current tax provision.

c. Deferred taxes decreased Walmart's income tax provision for the year becuase the Deferred taxes are benefit.

6 0
2 years ago
Your company is interested in producing and marketing a line of coffee that will penetrate the European market. Your firm is wil
Mrac [35]

A franchise can be used.

<h3><u>Explanation:</u></h3>

Franchise refers to the authorization that is given by the government for involving in commercial activities. It is the permission that is obtained legally for using the ideas, expertise and processes of some one else with their permissions.

In the example given, a firm is willing to provide all necessary materials for the preparation of coffee and wants to penetrate the European market. The company here provides all the equipment, ingredients, trademarks and operating systems and hence it can make use of franchise type of strategy.

7 0
2 years ago
A decrease in the required reserve ratio __________ the money supply; an open market purchase __________ the money supply.
Sloan [31]
A decrease in the required reserve ratio increases the money supply; an open market purchase increases the money supply.
6 0
2 years ago
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