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11) Roslynn Ltd. is a subsidiary of Goodale Co. Roslynn sold a machine to Goodale for a $50,000 gain. Goodale has now sold the machine to an unrelated party for a $20,000 gain. At the time of the sale, $35,000 of the profit on the sale from Roslynn was still unrealized. For consolidation purposes, what is the amount of gain that must be recognized on the sale of the machine? A) $15,000 B) $20,000 C) $30,000 D) $55,000 12) Grayson Ltd. acquired 60% of the outstanding common shares of Goldberg Ltd. for $480,000. At the date of acquisition, Goldberg's shareholders' […]

21) On June 1, 20X4, Chua (Canada) Co. entered into a 90-day forward contract to sell $500,000 Singapore dollars (SGD) to its bank on August 29,20X4. The following information has been provided: June 1, 90-day forward rate SGD$1 = $0.7750 July 1, 60-day forward rate SGD$1 = $0.7630 August 29, spot rate SGD$1 = $0.748 Chua has a June 30 year-end. What is the exchange gain (loss) at June 30, 20X4? A) $(6,000) B) $0 C) $1,500 D) $6,000 22) On June 1, 20X4, Chua (Canada) Co. entered into a 90-day forward contract to sell $500,000 Singapore dollars (SGD) to […]

11) What exchange rate is usually used to report non-monetary assets on the statement of financial position? A) Historical rate B) Spot rate C) Closing rate D) Fair value 12) What is a currency swap an example of? A) A futures contract B) A call option C) A derivative instrument D) A forward contract 13) Which of the following list would not be effective as a hedge for a Canadian company with a large number of transactions in Japan? A) Japanese yen held by a Canadian bank. B) Canadian funds held by a Japanese bank. C) A forward contract for […]

21) Which translation method should be used for the following subsidiaries? A) Extension of Parent Company Autonomous Temporal Temporal B) Extension of Parent Company Autonomous Temporal Current C) Extension of Parent Company Autonomous Current Current D) Extension of Parent Company Autonomous Current Temporal 22) For publicly-accountable companies, with foreign operations in countries with a hyper-inflationary economy, what should be done prior to translation? A) The subsidiary's financial statements must be adjusted for changes in the price levels of the subsidiary's country. B) The subsidiary's financial statements must be adjusted for changes in the price level of the parent's country. C) […]

  1) Under the temporal method, which of the following items would be translated using the year-end spot rate? A) Inventory B) Land C) Long-term debentures D) Building 2) Under the temporal method, which of the following items would be translated using the historical rate? A) Inventory B) Accounts receivable C) Accounts payable D) Long-term debentures 3) Which of the following accounts would be translated to the reporting currency at the current rate of exchange for an integrated subsidiary? A) Sales occurring evenly throughout the year B) Deposits received from customers for services to be rendered C) Capital assets D) […]