Indicators that the local currency is also the functional currency include all of the following except the parent typically provides the financing or provides a guarantee.
A functional currency is one that is utilized in the main economic setting in which a company conducts business. This is the setting in which an entity generates and spends money most frequently. When defining the functional currency of an entity, the following key considerations should be taken into account:
The principal currency influencing retail prices (usually the currency in which prices are denominated and settled).
The money of the nation whose laws and competition have the biggest impact on retail pricing.
The principal currency affecting labor expenses and other costs of goods sold (usually the currency in which prices are denominated and settled).
The currency in which an entity keeps its operating receipts and the currency in which debt and equity instruments are issued are less important deciding factors.
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Answer:
Dr Loss on Impairment $15,520.00
Cr Maturity Debt Securities $15,520.00
Explanation:
Preparation of the journal entry to record the impairment.
Journal entry
Sep. 30
Dr Loss on Impairment $15,520.00
Cr Maturity Debt Securities $15,520.00
($38,500-$22,980=$15,520)
(To record the impairment)
Answer:
Return on investment = -0.71%
Explanation:
<em>The return on investment is the sum of the dividends earned and capital gains made during the holding period of the investment. </em>
<em>Dividend is the proportion of the profit made by a company which is paid to shareholders. </em>
<em>Capital gains is another type of the return made on an equity investment as a result of increase in the value of the shares. It is difference between the cost of the share and the value at the time of disposal</em>.
Therefore, we can can compute the return on the investment as follows:
Total Return on investment =
(Capital gain/ loss + dividend )/purchase price × 100
Capital loss = (184 -140) × 120 = - 480
Dividend = 427
Commission = 34 + 39 =-73
Net loss on investment = - 480 - 73 + 427= -126
Return on investment = -126
/(148× 120) = -0.71%
Return on investment = -0.71%
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