1.Sun Corporation has a subsidiary, Moon Company, that began its operations at the beginning of 2014.

The functional
currency of Moon Company is the US dollar($) and the books are maintained in US Dollars. The functional currency and
presenation currency of Sun Corporation is the Phil.peso. Moon Company’s statement of financial position at the
beginning of 2014 is shown below:

ASSETS LIABILITIES & SHAREHOLDER’S EQUITY

Cash $ 38,000 Accounts Payable $22,500

Inventories 27,500 Long-term Debt 66,000

Plant Assets 27,500 Ordinary-share capital 67,000

Total Assets $ 155,500 Total Liab & SHE $155,500

The Plant Assets have a ten year life and a zero residual value. Straight line depreciation is used. Dividends of $5,000
were declared and paid during August. The exchange rates for 2014 are as follows:

Beginning of the year P46.00: $1

August P46.75: $1
End of the year P47.00:$1
Weighted Average P46.50:$1

The income statement for Moon Company for 2014 is as follows:

Sales $ 222,500
Cost of goods sold 145,000
Gross profit 77,500
Depreciation Exp $9,000
Other Operating Exp 51,000 60,000
Profit: 17,500

The Statement of Financial Position for Moon Company at the end of 2014 is as follows:
ASSETS LIABILITIES AND SHAREHOLDER’S EQUITY
Cash $ 7,500 Accounts Payable $27,500
Accounts Rec 57,000 Long-term Debt 66,000
Inventories 27,500 Ordinary Share Capital 67,000
Plant Assets,net 81,000 Retained Earnings 12,500
Total Assets $173,000 Total Liab & SHE $173,000

2.ABC Corporation, began its operations at the beginning of 2014. It’s functional currency is the US dollar and its
presentation currency is the Philippine Peso. ABC Corporation had cash of $225,000 and ordinary share capital of
$225,000 on January 1,2014. Revenue for 2014 wass $355,000. Operating expenses were $250,000. The balance sheet
for ABC Corporation in US Dollars at the end of 2014 is presented below:

ASSETS LIABILITIES AND SHAREHOLDER’S EQUITY

Cash $105,000 Accounts Payable $10,000
Accounts Rec. 170,000 Long-term Debt 155,000
Land 100,000 Ordinary Share Capital 225,000
Buildings,net 50,000 Retained Earnings 35,000
Total Assets $425,000 Total Liab and SHE $425,000

Dividends of $70,000 were declared and paid in October. The exchange rates for 2014 are as follows:
Beginning of the year P56.50
February 56.25
March 56.75
October 55.75
End of the year 55.50
Weighted Average 56.00

Required: Translate the financial statements of ABC Corporation into the presentation currency, which is the Philippine
Peso.

3. DEF Co. owns a subsidiary in US whose statement of financial position in US Dollars for the last two years follow:

December 31,2013 December 31,2014

Assets

Cash and Cash Equivalents $ 90,000 $ 75,000

Receivables 367,500 442,500

Inventory 480,000 510,000

PPE,net 765,000 690,000

Total Assets 1,702,000 1,717,500

Liabilities & Equity

Accounts Payable $165,000 $ 225,000

Long-term debt 967,500 855,000

Common Stock 345,000 345,000

Retained Earningss 225,000 292,500

Total Liabilities & Equity 1,702,500 1,717,500

Relevant Exchange rates are:

January 1,2013 $1 = P45

December 31,2013 $1 = P42.50

December 31,2014 $1 = P47.50

Average 2013 $1 = P43.75

September 12,2013 $1 = P40

DEF Co. formed the subsidiary on January 1,2013. Income of the subsidiary was earned evenly throughout the users and
the subsidiary declared dividends worth $15,000 on September 12,2013 and none were declared during 2014.