Total P450,000

21.
Excess of income over expenses P 200

Depreciation 70
Increase in due from national government agencies ( 10)
Increase in prepaid rent ( 15)
Increase in accounts payable 30
Total P450,000
20-4: a
Depreciation expense (H$ 12,000 x P5.80) P 69,600

Bad debts (H$ 8,000 x P5.80) 46,400
Rent (H$ 20,000 x P5.80) 116,000
Total P232,000
Average rate for the year is used in translating depreciation expense because this is more
reasonable estimation than the rate when the related asset was acquired (P4.80).
CHAPTER 21
MULTIPLE CHOICES - COMPUTATIONAL
21-1 b
21.3 a
21.4 a
21.5 b
21.6 b
21.7 a
21.8 c
21.9 a
21.10 a
21.11 c
21.12 d
21.13 b
21.14 b
21.15 b
136
21.16 a
21.17

Depreciation 70
Total P450,000
20-4: a

Bad debts (H$ 8,000 x P5.80) 46,400
Rent (H$ 20,000 x P5.80) 116,000
Total P232,000
CHAPTER 21
21-1 b
21.18 a
21.19 a
21.20 b
21.21 b
21.22 a
21.23 c
21.24 a
21.25 a
21.26 c
21.27 d
21.28 b
137
21.29 b
21.30 b
21.31 a
21.32

Depreciation 70
Total P450,000
20-4: a

Bad debts (H$ 8,000 x P5.80) 46,400
Rent (H$ 20,000 x P5.80) 116,000
Total P232,000
CHAPTER 21
21-1 b
21.33 a
21.34 a
21.35 b
21.36 b
21.37 a
21.38 c
21.39 a
21.40 a
21.41 c
21.42 d
138
21.43 b
21.44 b
21.45 b
21.46 a
Puno’s CI P 145,000
Dividend income (P40,000 x 90%) ( 36,000)
Puno’s CI from own operations 109,000
Salas’ CI from own operations 120,000
Consolidated CI P 229,000
16-7: b
Peter’s CI from own operations P1,000,000

Seller’s CI from own operations 200,000
Consolidated CI 1,200,000
Attributable to NCI (P200,000 x 20%) 40,000
Attributable to parent P1,160,000
16-8: a
2011 2012 2013

Investment in Son, Jan. 1 P310,000 P396,200MULTIPLE
CHOICES - COMPUTATIONAL
16-1: c, [(P260,000/80%) x 20%]
16-2: d, consolidated CI will decrease by P6,000 due to amortization of the allocated excess
(P60,000 / 10 years).
16-3: a, because there is no NCI in a wholly owned subsidiary.
16-4: c
Investment cost (price paid) P500,000

Less: Book value of interest acquired 480,000
Excess P 60,000
Cost Method Equity Method

Investment cost P500,000 P500,000
Parent’s share of subsidiary’s CI - 120,000
Dividends received from subsidiary - ( 48,000)
139
Amortization of allocated excess (P60,000/20) - ( 3,000)
Investment account balance, Dec. 31, 2013 P500,000 P569,000
16-5: a
NCI, January 2, 2013 [(P270,000/75%) x 25%] P 90,000

NCI in S Company dividends [(P60,000/75%) x 25%] (16,000)
NCI in S Company CI (P160,000 x 25%) 40,000
NCI balance, December 31, 2013 P114,000
16-6: a
16-7: b

16-8: a
2011 2012 2013

16-1: c, [(P260,000/80%) x 20%]
(P60,000 / 10 years).
16-4: c

Excess P 60,000
140
16-5: a
NCI, January 2, 2013 [(P270,000/75%) x 25%] P 90,000

16-6: a
16-7: b

16-8: a
2011 2012 2013

16-1: c, [(P260,000/80%) x 20%]
(P60,000 / 10 years).
16-4: c
141
16-4: c

Excess P 60,000

16-5: a
NCI, January 2, 2013 [(P270,000/75%) x 25%] P 90,000

16-6: a
16-7: b

16-8: a
2011 2012 2013

16-1: c, [(P260,000/80%) x 20%]
142
(P60,000 / 10 years).
16-4: c

Excess P 60,000

16-5: a
NCI, January 2, 2013 [(P270,000/75%) x 25%] P 90,000

16-6: a
Direct exchange rate:

December 1 1 ÷ 2.22 yen = P 0.45
December 31 1 ÷ 2.70 yen = 0.37
Decrease in forex rate P 0.08
Forex gain (200,000 yen x P0.08) P 16,000
19-2: c.
Forex rate, December 1 P 0.45

Forex rate, December 31 0.47
Increase in forex rate P 0.02
Forex gain (1,500,000 yen x P0.02) P 30,000
19-3: d.
September 30:
Forex rate, September 1 P 5.61
Forex rate, September 30 5.59
Forex gain (200,000 hkg.$ x P0.02) P 4,000
143
December 31:
Forex rate, October 1 P 5.59
Forex loss (200,000 hkg.$ x P0.03) P (6,000)
19-4: c.
Forex loss on importation of merchandise:

Peso equivalent, January 10, 2013 P 600,000
Peso equivalent, April 20, 2013 608,000
Forex loss (increase) P (8,000)
Forex loss on notes payable:

Peso equivalent, September 1, 2013 P 3,000,000
Peso equivalent, December 31, 2013 3,200,000
Forex loss on principal P (200,000)
Add: Forex loss on interest
Based on P 3,2000,000 P 120,000
Based on P 300,000,000 (P3,000,000x10%x4/12) 100,000 20,000
Forex loss P (220,000)
Total forex loss (P 8,000 + P220,000) P (228,000)
19-5: a.
Direct forex rate – Transaction date (P 1 ÷ $0.018) P 55.5555

Direct forex rate – Balance sheet date (P 1 ÷ $0.017) 58.8235
Direct forex rate – Settlement date (P 1 ÷ $0.020) 50.0000
Forex gain (loss), 2012

Transaction date ($10,000 x P55.5555) P 555,555
Balance sheet ($10,000 x P 58.8235) 588,235
Forex loss (increase) P ( 32,680)
Forex gain (loss), 2013

Balance sheet date ($10,000 x P58.8235) P 588,235
Settlement data ($10,000 x P 50.00) 500,000
Forex gain (decrease) P 88,235
Forex gain (200,000 yen x P0.08) P 16,000
19-2: c.
Forex rate, December 1 P 0.45

144
Forex gain (1,500,000 yen x P0.02) P 30,000
19-3: d.
September 30:
Forex rate, September 1 P 5.61
Forex rate, September 30 5.59
Forex gain (200,000 hkg.$ x P0.02) P 4,000
December 31:
Forex rate, October 1 P 5.59
Forex loss (200,000 hkg.$ x P0.03) P (6,000)
19-4: c.
Forex loss on importation of merchandise:

Peso equivalent, January 10, 2013 P 600,000
Peso equivalent, April 20, 2013 608,000
Forex loss (increase) P (8,000)
Forex loss on notes payable:

Peso equivalent, September 1, 2013 P 3,000,000
Peso equivalent, December 31, 2013 3,200,000
Forex loss on principal P (200,000)
Add:
20-5: d
[25,000 LCU x (1 ÷ 2)]
20-6: d
Long-term receivable: [1,500,000 LCU x (1 ÷ 1.5 LCU)] P1,000,000
Long-term debt: [2,400,000 LCU x (1 ÷ 1.5 LCU)] P1,600,000
20-7: b (NT Dollar 10,000 x P1.70)
20-8: b
Beginning inventory 40,000 Rupee

Purchases 300,000
Goods available for sale 340,000
Ending inventory 30,000
145
Cost of goods sold 310,000 Rupee
Translated cost of goods sold (310,000 Rupee x P.5745) P178,095
20-9: c
NZ Dollar Rate Phil Peso

Net assets, 1/1/013 20,000 P15 P300,000
Increase in net assets:
Net income, 2005 (30,000 – 20,000) 10,000 P19 190,000
Net assets 12/31/013 30,000 P490,000
Net assets at current rate 30,000 P21 630,000
Translation adjustment, 2013 (credit) P140,000
20-10: b
Equipment [800,000 x (1 ÷ 50)] P16,000
Accumulated depreciation [560,000 x (1 ÷ 50)] P11,200
Depreciation [80,000 x (1÷ 50)] P 1,600
20-11: a (25,000 Rupee x P1.24)
20-12: d (5,000 Rupee x P1.30)
20-13: c
Investment cost, Jan. 1, 2013 P402,000

Less: Book and fair value of net assets acquired
(300,000 Rp x P1.20) 360,000
Goodwill P 42,000
Pesos Rupee
Goodwill P42,000 35.000 (P42,000 / P1.20)
Impairment 4,340 (3,500 Rp x P1.24) 3,500
Balance P37,660 31,500
Translated goodwill (31,500 Rp x P1.32) P41,580
20-14: b
Translation adjustment from translating the trial balance P12,000 Cr

Translation adjustment from translating goodwill (per 20-13) 3,920 Cr
Total translation adjustment P15,920
20-15: b
Investment in Subsidiary account, Jan. 1, 2013 P1,600,000
146
Share in subsidiary net income [(800,000 yen x 70%) x P.57] 319,200
Translation adjustment (P25,000 x 70%) 17,500
Share of subsidiary dividends [(50,000 yen x 70%) x P.59] ( 20,650)
Investment in Subsidiary account, December 31, 2013 P1,916,050
20-16: d
20-17: a
Phil Peso Thailand Baht
Initial inventory transfer date:
Selling price P120,000÷1.60 75,000 B
Cost (80,000)
Profit 40,000
Ending Inventory (75,000 x 1.70) 127,500
20-18: a (P127,500 – 40,000)
20-19: a
Yen Exchange Rate Phil Peso
Net asset beginning 200,000 .44 88,000
Comprehensive income 200,000 .46 92,000
Net asset translated at rate:
During the year 400,000 180,000
At end of year 400,000 .48 192,000
OCI - Translation adjustment (credit) (12,000)
20-20: a (70,000 rupee x P1.50)
20-21: c
Investment cost P1,210,000
Book value of interest acquired (1,100,000 x 1.10) x .80 968,000
Goodwill 242,000
PROBLEMS
Problem 20-1
a.
Pilipino Company
Translation Working Paper
December 31, 2013
147
Yen Exchange Rate Phil. Pesos
Cash and cash equivalents 40,000 .40 CR 16,000
Accounts receivable 120,000 .40 CR 48,000

Inventory 100,000 .40 CR 40,000
Plant and equipment 700,000 .40 CR 280,000
Cost of sales 360,000 .425 AR 153,000
Operating expenses 140,000 .425 AR 59,500
Depreciation expenses 60,000 .425 AR 25,500
Total 1,520,000 622,000
Accumulated Other Comprehensive Income -
Translation Adjustment 25,000
Total debits 647,000
Accumulated depreciation 240,000 .40 CR P96,000

Accounts payable 80,000 .40 CR 32,000
Common stock 200,000 .44 HR 88,000
Retained earnings, Jan. 1 400,000 .44 HR 176,000
Sales 600,000 .425 AR 255,000
Total credits 1,5200,000 647,000
CR – Current Rate
AR – Average Rate
HR – Historical Rate
b. Proof of Translation Adjustment
Yen Translation Phil. Pesos

Rate
Net assets at beginning of year 600,000 .44 264,000
Adjustment for changes in net assets
Position during year
Comp. Income for the year 40,000 .425 17,000
Net assets translated at rates in effect
For those items 281,000
Net assets at end of year 640,000 .40 256,000
Change in translation adjustment during year
(to OCI) – net decrease (debit) 25,000
Accumulated OCI – translation adjustment,1/1 -0-
Accumulated OCI – translation adjustment,

Dec. 31 (debit) 25,000
Problem 20-2
(1) Trial Balance Translation

Thailand Translation Philippine
Baht Rate Pesos
Cash and cash equivalents 7,000 1.60 CR 11,200
148
Accounts receivable (net) 20,000 1.60 CR 32,000
Receivable from Davao 5,000 1.60 CR 8,000
Inventory 25,000 1.60 CR 40,000
Plant and equipment 100,000 1.60 CR 160,000
Cost of goods sold 70,000 1.50 AR 105,000
Depreciation expense 10,000 1.50 AR 15,000
Operating expenses 30,000 1.50 AR 45,000
Dividends paid 15,000 1.54 HR 23,000
Total debits 282,000 439,300
Accumulated depreciation 10,000 1.60 CR 16,000

Accounts payable 12,000 1.60 CR 19,200
Bonds payable 50,000 1.80 CR 80,000
Common stock 60,000 1.46 HR 87,600
Sales 150,000 1.50 AR 225,000
Total 282,.000 427,800
Accumulated other comprehensive
Income – Translation adj. (credit) 11,500
Total credits 439,300
CR – Current Rate
AR – Average Rate
HR – Historical Rate
(2) Proof of Translation Adjustment
Thailand Translation Philippine

Baht Rate Pesos
Net assets at beginning of year 60,000 1.46 87,600
Adjustments for changes in net
asset position during year:
Comp. Income for year (sch 1) 40,000 1.50 60,000
Dividends paid (15,000) 1.54 (23,100)
Net assets translated at:
Rates during year 124,500
Rates at end of year 85,000 1.60 136,000
Change in OCI – translation adj.
during year – Net increase 11,500
Accumulated OCI – translation
adjustment – Jan. 1 -0-
Change in OCI – translation
adjustment, Dec. 31 (credit) 11,500
Problem 20-2, continued:

Schedule 1:
Sales 150,000 Thailand Baht
Cost of goods sold ( 70,000)
Depreciation expense ( 10,000)
Operating expenses ( 30,000)
149
Comp. Income 40,000 Thailand Baht
(b) The change in the translation adjustment of P11,500 is included as a credit in the other
comprehensive income on the Statement of Comprehensive Income. The other comprehensive
income is then accumulated and reported in the stockholders’ equity section of the consolidated
balance sheet as presented below:
Net assets P136,000
Common stock P 87,600

Retained earnings, Dec. 31 36,900
Accumulated Other Comprehensive Income 11,500
Total P136,000
Problem 20-3
a. Translation Work paper
Exchange Philippine
Brunei $ Rate Pesos
Cash and cash equivalents 1.600 33 CR 52,800
Accounts receivable 2,500 33 CR 82,500
Inventory 4,000 33 CR 132,500
Plant and equipment 35,000 33 CR 1,155,000
Cost of sales 17,000 31 AR 527,000
Operating expenses 7,000 31 AR 217,000
Depreciation expense 3,000 31 AR 93,000
Dividends 1,500 32 HR 48,000
Total debits 71,600 2,307,300
Accumulated depreciation 9,000 31 AR 297,000

Accounts payable 2,600 33 CR 85,800
Common stock 20,000 30 HR 600,000
Retained earnings, Jan. 1 10,000 30 HR 300,000
Sales 30,000 31 AR 930,000
Total 71,600 2,212,800
Accumulated OCI – Translation
Adjustment 94,500
Total credits 2,307,300

Proof of Translation Adjustment (not required)
Translation
Brunei $ rate Philippine
Pesos
150
Net assets at beginning of year 30,000 30 900,000
Adjustment for net assets position
during the year:
Comp. Income 3,000 31 93,000
Dividends paid (1,500) 32 (48,000)
Net assets translated at rates
in effect for those items 945,000
Net assets at end of year 31,500 33 1,039,500
Change in translation adjustment during
Year to OCI – net increase (credit) 94,500
Accumulated OCI – translation adj. 1/1 -0-
Accumulated OCI – translation
Adjustment – 12/31 (credit) 94,500
b. Parent Company entries affecting Investment in Moslem Co. (equity method)
Jan. 2: Investment in Moslem Co. 900,000

Cash 900,000
To record investment cost.
Oct. 15: Cash 48,000

Investment in Moslem Co. 48,000
To record dividends received
Dec. 31: Investment in Moslem Co. 93,000

Investment income 93,000
To record equity in income of Moslem
Investment in Moslem Co. 94,500

Other Comprehensive Income – Translation
adjustment 94,500
To record parent’s share of change in translation
Adjustment
Problem 20-4
UK Company
Translation Working Paper
151
Year Ended December 31, 2013
Exchange In
In Pounds Rate Phil. Pesos
Statement of Comp. Income
Sales 90,000 P67.50 (A) 6,075,000
Cost of sales (80,000) 67.50 (A) (5,400,000)
Depreciation expense (1,500) 67.50 (A) (101,250)
Other expenses (5,750) 67.50 (A) (388,125)
Comp. Income carried forward 2,750 185,625
Retained Earnings Statement

Balance, 1/1 2,500 B 119,500
Comp. Income from above 2,750 F 185,625
Balance, 12/31 5,250 305,125
Statement of Financial Position

Cash and cash equivalents 2,500 67.60 (C) 169,000
Accounts receivable 4,000 67.60 (C) 270,400
Inventories, at cost 5,500 67.60 (C) 371,800
Prepaid expenses 750 67.60 (C) 50,700
Property, plant and equipment (net) 9,000 67.60 (C) 608,400
Total assets 21,750 1,470,300
Accounts payable 3,500 67.60 (C) 236,600

Current portion of long-term debt 500 67.60 (C) 33,800
Long-term debt 7,500 67.60 (C) 507,000
Capital stock 5,000 67.20 (H) 336,000
Retained earnings from above 5,250 1,418,525
Total
Cumulative translation adjustment:
Balance, 1/1 50,000
Current translation adjustment G 1,775
Balance, 12/31 51,775
Total liabilities and stockholders’ equity 21,750 1,470,300
Translation Code:
C = Current rate
H = Historical rate
A = Average rate
B = Balance in Philippine pesos at the beginning of the year.
F = Per Statement of Comprehensive Income
Problem 20-5
Goodluck Corporation
Foreign Exchange Translation Worksheet
152
Year Ended December 31, 2013
Trial Trial Income State.

Balance Exchange Balance Statement of FP
(In Pounds) Rate (In Pesos) (In Pesos) (In Pesos)
Cash and cash equivalents 15,000 0.95 C 14,250 14,250
Marketable securities 25,000 0.95 C 23,750 23,750
Accounts receivable 60,000 0.95 C 57,000 57,000
Inventories 80,000 0.95 C 76,000 76,000
Property, plant and equip-net 420,000 0.95 C 399,000 399,000
Cost of goods sold 150,000 0.90 A 135,000 135,000
Depreciation expense 40,000 0.90 A 36,000 36,000
Other expenses 10,000 0.90 A 9,000 9,000
Totals 800,000 750,000 180,000 570,000
Accounts payable 50,000 0.95 C 47,500 47,500

Current portion of LT debt 40,000 0.95 C 38,000 38,000
Long-term debt 120,000 0.95 C 114,000 114,000
Sales 200,000 0.90 A 180,000 180,000
Other revenues 50,000 0.90 A 45,000 45,000
Capital stock 250,000 0,87 H 217,500 217,500
Retained earnings, 1/1 90,000 G 70,000 70,000
FC translation adjustment
Balance, 1/1 G 1,500 1,500
Current year B 36,500 36,500
Net income B (45,000) 45,000
Totals 800,000 750,000 180,000 570,000
Translation Code:
A = Average rate
B = Current rate
H = Historical rate
G = Given
B = Balancing amount
Problem 20-6
a. Direct and indirect exchange rates
Direct A$ Indirect
January 1, 2012 P.03333=1 A$30=P1
December 31, 2012 P.02857=1 A$35=P1
December 31, 2013 P .025=1 A$40=P1

The peso strengthened during 2012 because the number of A$ one Phil. Peso could acquire
at the end of the year (35) is greater than the number of A$ that could be acquired at the
beginning of the year (30); therefore, the value of the peso has increased relative to the A$
during 2012. The peso continued to strengthen during 2013.
153
b. Translated December 31, 2012, Statement of Financial Position:
Subsidiary’s Direct Translated
Trial Balance Exchange Trial Balance
_ (in A$)__ Rate ( in $)___
Cash A$ 100,000 P.02857 P 2,857
Receivables 400,000 P.02857 12,857
Inventory 680,000 P.02857 19,428
Fixed assets 1,000,000 P.02857 28,570
Total R 2,230,000 P 63,712
Accumulated OCI-
translation adjustment (debit) 2,903
Total debits P 66,615
Current payables A$ 260,000 P.02857 P 7,428

Long-term debt 1,250,000 P.02857 35,713
Common stock 500,000 P.03333 16,665
Retained earnings 220,000 P.03333 6,809
Total credits A$2,230,000 P 66,615
P.03333= average of beginning and ending exchange rates, rounded to 4 decimal points:
P.030945= [(P.03333 + P.02856) /2]
(Not required: Proof of translation adjustment (debit) of P 2,903)
Translation
___A$___ _ Rate_ _Dollars_
Net assets, 1/1/12 A$ 500,000 P.03333 P 16,665
Adjustment for changes in
net assets during year:
Comp. income 220,000 P.03095 6,809
Rates during year P 23,474
Rates at end of year A$ 720,000 P.02857 (20,570)
Change in translation
Adjustment during year (debit) P 2,904*
*Difference of P1 (P 2,904 – P 2,903) due to rounding of exchange rates.

c. Translated Statement of Financial Position – December 31, 2013:
Subsidiary’s Direct Translated

Trial Balance Exchange Trial Balance
154
(in A$) __Rate (in P)__
Cash A$ 80,000 P.025 P 2,000
Receivables 550,000 P.025 13,750
Inventory 720,000 P.025 18,000
Fixed assets 900,000 P.025 22,500__
Accumulated other A$ 2,250,000 P56,250
comprehensive income-
translation adjustment (debit) 5,635___
Total debits P61,885
(a)The retained earnings in pesos would begin with the December 31, 2012, peso balance
(P6,809) that would be carried forward. To this would be added 2013’s Comp.Income of
A$90,000, which is the change in retained earnings in A$ multiplied by the 2013 exchange
rate of P.02679 [(P.02857 + P.025/2)] which equals P2, 411. Therefore, translated retained
earnings on December 31, 2013, is P9, 220 (P9, 220= P6, 809 + P2, 411)
(Not required: Proof of translation adjustment (debit) of P5, 635)
Australian Translation
Dollar _ Rate Pesos___
Net assets, 1/1/13 A$ 720,000 P.02857 P20, 570
Adjustment for changes in
net assets during year:
Comp. income 90,000 P.02679 2,411___
rates during year P22, 981
Other comprehensive income-
rate at end of year A$ 810,000 P.025 (20,250)__
Change in other comprehensive
income- translation
adjustment during year (debit) P2, 731
income- translation adjustment, 1/1/13 2,904___
income- translation adjustment, 12/31/13 (debit) P5, 635
d. The P2, 731 change in the accumulated other comprehensive income- translation
adjustment during 2013 would be reported as a component of other comprehensive
income on 2013 statement of comprehensive income.
155

Total P450,000

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21.

Excess of income over expenses P 200

Depreciation expense (H$ 12,000 x P5.80) P 69,600

MULTIPLE CHOICES - COMPUTATIONAL

Excess of income over expenses P 200

Depreciation expense (H$ 12,000 x P5.80) P 69,600

MULTIPLE CHOICES - COMPUTATIONAL

Excess of income over expenses P 200

Depreciation expense (H$ 12,000 x P5.80) P 69,600

MULTIPLE CHOICES - COMPUTATIONAL

Peter’s CI from own operations P1,000,000

2011 2012 2013

16-1: c, [(P260,000/80%) x 20%]

16-3: a, because there is no NCI in a wholly owned subsidiary.

Investment cost (price paid) P500,000

Cost Method Equity Method

NCI, January 2, 2013 [(P270,000/75%) x 25%] P 90,000

Peter’s CI from own operations P1,000,000

2011 2012 2013

16-1: c, [(P260,000/80%) x 20%]

16-3: a, because there is no NCI in a wholly owned subsidiary.

Investment cost (price paid) P500,000

NCI, January 2, 2013 [(P270,000/75%) x 25%] P 90,000

Peter’s CI from own operations P1,000,000

2011 2012 2013

16-1: c, [(P260,000/80%) x 20%]

16-3: a, because there is no NCI in a wholly owned subsidiary.

Investment cost (price paid) P500,000

Cost Method Equity Method

NCI, January 2, 2013 [(P270,000/75%) x 25%] P 90,000

Peter’s CI from own operations P1,000,000

2011 2012 2013

16-1: c, [(P260,000/80%) x 20%]

16-3: a, because there is no NCI in a wholly owned subsidiary.

Investment cost (price paid) P500,000

Cost Method Equity Method

NCI, January 2, 2013 [(P270,000/75%) x 25%] P 90,000

Direct exchange rate:

Forex gain (200,000 yen x P0.08) P 16,000

Forex rate, December 1 P 0.45

Forex gain (1,500,000 yen x P0.02) P 30,000

Forex gain (200,000 hkg.$ x P0.02) P 4,000

Forex loss (200,000 hkg.$ x P0.03) P (6,000)

Forex loss on importation of merchandise:

Forex loss on notes payable:

Total forex loss (P 8,000 + P220,000) P (228,000)

Direct forex rate – Transaction date (P 1 ÷ $0.018) P 55.5555

Forex gain (loss), 2012

Forex gain (loss), 2013

Forex gain (200,000 yen x P0.08) P 16,000

Forex rate, December 1 P 0.45

Forex gain (200,000 hkg.$ x P0.02) P 4,000

Forex loss (200,000 hkg.$ x P0.03) P (6,000)

Forex loss on importation of merchandise:

Forex loss on notes payable:

[25,000 LCU x (1 ÷ 2)]

Long-term receivable: [1,500,000 LCU x (1 ÷ 1.5 LCU)] P1,000,000

Long-term debt: [2,400,000 LCU x (1 ÷ 1.5 LCU)] P1,600,000

20-7: b (NT Dollar 10,000 x P1.70)

Beginning inventory 40,000 Rupee

Translated cost of goods sold (310,000 Rupee x P.5745) P178,095

NZ Dollar Rate Phil Peso

Equipment [800,000 x (1 ÷ 50)] P16,000