1

CHAPTER 17
SUGGESTED ANSWERS
Exercise 17 - 1
Jan.

Mar.

May

5 Purchases
Accounts Payable
70,000 x P25.56

1,789,200

9 Purchases
Accounts Payable
100,000 x P.1678

16,780

10 Accounts Payable
Foreign Exchange Gain or Loss
Cash
70,000 x P25.60 = P1,792,000
16 Accounts Payable
Foreign Exchange Gain or Loss
Cash
100,000 x P.1550

1,789,200

16,780
1,789,200
2,800
1,792,000
16,780
1,280
15,500

Exercise 17 -2
Mar.

Apr.

14 Merchandise Inventory
Accounts Payable
20,000 x P52.85

1,057,000

10 Merchandise Inventory
Accounts Payable
60,000 x P.7637

45,822

14 Accounts Payable
Foreign Exchange Gain or Loss
Cash
20,000 x P52.75
May

10 Accounts Payable
Foreign Exchange Gain or Loss
Cash
60,000 x P.8125

1,057,000

45,882
1,057,000
2,000
1,055,000
45,822
2,928
48,750

Exercise 17 - 3
May

22 Accounts Receivable
Sales
10,000 x P5.4085
31 Accounts Receivable
Sales

54,085
54,085
8,516
8,516

500 25.820 15.639 58.000 115.000 x P. net Machinery.000 200.51168 Translation Rate .967 .51168 .540 24 8.142 23.000 30.967 Liabilities and Stockholders' Equity Accounts payable Long-term debt Common stock Retained earnings Translation adjustment Total liabilities and stockholders' equity Supporting computations: A. 2006 Italian Lira 300.000 Sales Cost of goods sold Gross profit Operating expenses Net income Cash Accounts receivable Inventories Land Building.504 102.000 100.000 x P5.500 212.Chapter 17 .51278 .2129 June 22 Cash Foreign Exchange Gain or Loss Accounts Receivable 10.015 930 54.51278 .50859 5.085 30 Cash Foreign Exchange Gain or Loss Accounts Receivable 8.000 40.168 28.000 x .516 Exercise 17 -4 Jack Company Income Statement For the Year Ended December 31.632 522 108.000 85.000 x .500 Translation Rate .692 25.51168 .Suggested Answers page 2 40.945 2.51278 7.500 ______ 212.015 55.872 12.51278 .000 32.000 50.537 .51278 .538 108.500 22.51278 .843 11.511 43. net Total assets Bell Company Balance Sheet December 31.500 55.482 16.51278 Philippine Peso 153.026 Philippine Peso 4.5015 = P55.000 45.336 51.383 20.51278 . Common stock 110.000 55.50732 15. 2006 Assets Italian Lira 9.

026 ( 6.000 23.500 Nona Company Income Statement For the Year Ended December 31.000 155.000 225.after adjustment Translation adjustment Italian Lira 110.before adjustment Net assets.500) 32.827.587.880.500) 5.5 Nona Company Balance Sheet December 31.000 100.000 8. 2006 Assets US Dollars 105.000 147.000 ( 12.712.000 .Chapter 17 .500 12.114 75. end .000.000 23.500 Philippine Peso 19.000 ______ 212.50 Philippine Peso 5.000 35.602.51155 .000 50.000 2.00 56. beginning Add (deduct): Net income Dividends Common stock issued Net assets. end .636 522 Exercise 17 .026 ( 6.550.000 (12. Translation Rate .000 5. 2006 Revenue Operating expenses US Dollars 355.587.50 56.50 55.500 .51155 Philippine Peso -------23.000 170.435.394) 16.50 55.775.500 Beginning balance Net income Dividends Ending balance B.50 55.000 Translation Rate .Suggested Answers page 3 58.500 Liabilities and Stockholders' Equity Accounts payable Long-term debt Common stock Retained earnings Translation adjustment Total liabilities and stockholders' equity 10.500 9.000 250.00 555.51168 . net Total assets Translation Rate 55. Retained earnings Italian Lira -----45.500 147.632 Translation adjustment Net assets.394) 2.000 Cash Accounts receivable Land Building.000 55.50 Translation Rate 56.500 260.50 55.945 23.50859 45.537 75.51278 Philippine Peso 55.500 1.51168 .000 14.977.50732 .482 B.000 425.

000 P 270. 8.after adjustment Translation adjustment US Dollars 225.500 Translation adjustment Net assets.500) 1.Suggested Answers page 4 Net income B.50 Philippine Peso 12.000 loss 17-D 1.200. 5.000 260.000 Beginning balance Net income Dividends Ending balance B.000 14.000 ( 3.P900.00 55.880.500) 14.before adjustment Net assets.000 55. D P480.000 – P560. end .000 – P5.000 .690.712.000) 35.22.000 .500 105. 7. 105.75 Philippine Peso -------5. C D D B 17-B 1.000 260.430.000) Principal amount of loan (P5.902.000 = P80. 6.000 Translation Rate 56. A A A B 5.000 Retained earnings US Dollars -----105. 2. 3.19) P7.000 .000 yen x (P.880.50 MULTIPLE CHOICE 17-A 1.000 56.000.000 ( 70.000 200.00 55.000) Interest on loan (P260.P.Chapter 17 .000 (70.977.880.000 ( 3.500 gain 17-C 1. 4.P250.000 10.000 Translation Rate 56. D Foreign exchange transaction loss on: Payment of purchases (P960. D 250.902.000) 260. beginning Add (deduct): Net income Dividends Net assets. end .75 5.000) Total P 60.

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