COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES

3rd Trimester, AY 2020-2021

HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

‫ئ‬TOPIC Foreign Currency Translation

ACTIVITY Homwork 2
TITLE
Use foreign currency translation methods to restate the financial statement of the
multinational corporation with foreign currency transactions.
ACTIVITY
OBJECTI
VES

ACTIVITY
DIRECTI PART I. PROBLEM-SOLVING (Total
ON &
Marks = 30 marks )
REQUIRE
MENT/S DIRECTION: Read the cases, analyse

and answer the requirements.

1. Unicorn Gases (U.S. Company) owns Pryce Gases, Inc. a subsidiary in

Italy, which was established December 31,2018. Pryce immediately
purchased inventory for 600,000 Euros
Phoenix Inc.

1
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

balance sheet items as of 12/31/2018, in Euros:

Cash Capital stock
1000,000
400,000
Inventory

600,000
Total Assets Total Liabilities and OE
1000,000 1000,000

I
t
a
l
i
a

2
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

n
c
.
I
n
c
o
m
e

S
t
a
t
e
m
e
n
t

D
e
c
e
m
b

3
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

e
r

3
1
,

2
0
1
9

(
i
n

E
u
r
o
s
)
Sales 8,000,000.
(1)
Less: Costs of Goods Sold 6,000,000.

4
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

(2)
Gross Profit 2,000,000.
(3)
Selling and Administrative Exp. 500,000
(4)
Depreciation Expenses 200,000
(5)
Interest Expense 180,000
(6)
Income before Income Tax 1,100,000.
(7)
Income Tax 275,000
(8)
Net Income 825,000
(9)

5
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

I
t
a
l
i
a

I
n
c
.
B

6
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

a
l
a
n
c
e

S
t
a
t
e
m
e
n
t

D
e
c
e
m
b
e
r

7
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

1
,

2
0
1
9

(
i
n

E
u
r
o
s
)
ASSET
S
Cash 550,000
(10)
Accounts Receivable 600,000
(11)

8
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

Inventory (FIFO) 800,000

(12)
Property, Plant and Equipment 2,000,000.
(13)
Accum. Depreciation (200,000). 1,800,000.
(14) (15)

Patents 80,000 (16)

Total Assets 3,830,000 (17)

LIABILITIE
S&
EQUITY
Accounts Payable 330,000 (18)
Long-term Debts 2,000,000 (19)
Capital Stock 1,000,000. (20)
Retained Earnings 500,000 (21)
Total Liabilities & Equity 3,830,000. (22)

9
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

ACTIVITY
OUTPUT Submit the answers to the moodle.

10
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

ITALIA
INCOME STATEMENT (in Euro) Exchange Rate
DECEMBER 31, Year 1

Sales 8,000,000

Cost of Goods Sold 6,000,000 $2.45 = 1 euro

11
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

Gross Profit 2,000,000 $2.45 = 1 euro

Selling and Adm. Exp. 500,000 $2.45 = 1 euro
Depreciation Expense 200,000 $2.45 = 1 euro
Amortization Expense 20,000 $2.45 = 1 euro
Interest Expense 180,000 $2.45 = 1 euro
Income b4 Income Tax 1,100,000 $2.45 = 1 euro
Income Tax 275,000 $2.45 = 1 euro
Net Income 825,000 $2.45 = 1 euro

ITALIA
INCOME STATEMENT (in Euro) Exchange Rate
DECEMBER 31, Year 1
Retained Earnings
0 $2.50 = 1 euro
1/1/Y1
Net Income 825,000 $2.50 = 1 euro

12
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

Less: Dividends
-325,000 $2.27 = 1 euro
12/1/Y1
Retained
500,000 $2.30 = 1 euro
Earnings,12/31/Y1

ITALIA
BALANCE
SHEET (in Euro) Exchange Rate (In US $)
DECEMBER
31, Year 1

13
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

Cash 550,000 $2.30 = 1 euro 1,265,000 (14)

Accts
600,000 $2.30 = 1 euro 1,380,000 (15)
Receivable
Inventory
800,000 $2.30 = 1 euro 1,840,000 (16)
(FIFO)
PPE 2,000,000 $2.30 = 1 euro 4,600,000 (17)
Accum.
-200,000 $2.30 = 1 euro 460,000 (18)
Deprn- PPE
Patents 80,000 $2.30 = 1 euro 184,000 (19)
Total Assets 3,830,000 $2.30 = 1 euro 8,809,000 (20)
Liabilities &
     
Equity
Accounts
330,000 $2.30 = 1 euro 759,000 (21)
Payable
Long-term
2,000,000 $2.30 = 1 euro 4,600,000 (22)
Debts
Capital
1,000,000 $2.50 = 1 euro 2,500,000 (23)
Stocks

14
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rd Trimester, AY 2020-2021
HWAC NO. 2

COURSE CODE BSIB622, COURSE TITLE International Accounting

BSIS622
SECTION TIME DAYS ROOM
STUDENT NAME ID NO.
TEACHER’S NAME Narjis Al Haddad DATE

Retained
500,000 $2.30 = 1 euro 1,150,000 (24)
Earnings
Liab. & Equity 3,830,000   9,009,000 (25)
Translation Adjustment -26
Liabilities &
3,830,000   9,009,000 (27)
Equity

FACULTY
FEEDBAC
K

15