COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES

3rdTri., AY 2021-2022
HWAC 2
MARKS

COURSE CODE BSIB622 COURSE TITLE INTERNATIONAL ACCOUNTING

SECTION TIME DAYS ROOM
STUDENT NAME ID NO. DATE

TOPICS TRANSLATION OF FOREIGN CURRENCY FS

ASSIGNMENT A US-based Brook company invested a subsidiary in South Africa on Jan. 1, Year
DIRECTION & 1 by investing 300,000 South African rand (ZAR) when the exchange rate was US
REQUIREMENT/ $0.09/ZAR. On that period. The foreign subsidiary, Southa, borrowed ZAR
500,000 from local banks on a 10-year note to finance the acquisition of plant and
S equipment. The subsidiary’s opening balance sheet (in ZAR) was as follows:
(Identify the ILOs to
be assessed at the
Balance Sheet January 1, Year 1
end of each
requirement. Include Cash 300,000 Long-term debt 500,000
the rubric or marking Plant and equipment 500,000 Capital Stock 300,000
scheme for each Total 800,000 Total 800,000
item/requirement.)
Dividends of ZAR 20,000 were paid to Brook on June 1 and Dec. 1. The ending
inventory was acquired on November 15, Year 1.
Using the financial data below, compute the translation adjustment using
Current rate method.

Exchange Rates USD/ZAR

January 1, Year 1 0.090
June 1, Year 1 0.095
Average for Year 1 0.096
November 15, Year 1 0.100
December 1, Year 1 0.105
December 31, Year 1 0.110

.
Exchange
ZAR Rate USD
Sales 1,000,000 0.096 96,000
Cost of goods sold (600,000) 0.096 (571600)
Gross profit 400,000 0.096 38,400
Depreciation expense (50,000) 0.096 (4,800)
Other operating expenses (150,000) 0.096 (197000)
Income before tax 200,000 0.096 (8,640)199000
Income taxes (90,000) 0.096 (8,640)
Net income 110,000 10.560
Prepared by : Reviewed / Checked: Approved by:

MA. CECILIA LAGARAS CPA. DM JAYENDIRA SANKAR, PhD VINODH NATARAJAN, Ph.D
Course Coordinator Dept. Head, BSIB Dean, CAFS
Date: July 3, 2022 Date: July 3, 2022 Date: July 3, 2022
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rdTri., AY 2021-2022
HWAC 2
MARKS

COURSE CODE BSIB622 COURSE TITLE INTERNATIONAL ACCOUNTING

SECTION TIME DAYS ROOM
STUDENT NAME ID NO. DATE

Retained earnings, 1/1/Y1 -

Net income, Year 1 110,000 10.560
Dividends, 6/1/Y1 (20,000) (1900)
Dividends, 12/1/Y1 (20,000) 0.105 (2,100)
Retained earnings, 12/31/Y1 70,000 6,560

Cash 80,000 0.110 8800

Receivables 150,000 0.110 16.500
Inventory 270,000 0.110 29,700
Plant and equipment 500,000 0.110 55.000
Less: accumulated depreciation (50,000) 0.110 5,560
Total assets 950,000 115560

Accounts payable 80,000 0.110 8800

Long-term debt 500,000 0.110 55000
Common stock 300,000 0.090 27000
Retained earnings, 12/31/Y1 70,000 6560
Cumulative translation adjustment - 7140
Total liabilities and stockholders'
equity 950,000 115560

Calculation of cumulative translation

adjustment
Exchange
ZAR Rate USD
Net assets, 1/1/Y1 300,000 0.090 27000
Net income, Year 1 110,000 Above 10.560
Dividends, 6/1/Y1 (20,000) 0.095 (1900)
Dividends, 12/1/Y1 (20,000) 0.105 (2100)
Net assets, 12/31/Y1 370,000 33560
Net assets, 12/31/Y1 at
Prepared by : Reviewed / Checked: Approved by:

MA. CECILIA LAGARAS CPA. DM JAYENDIRA SANKAR, PhD VINODH NATARAJAN, Ph.D
Course Coordinator Dept. Head, BSIB Dean, CAFS
Date: July 3, 2022 Date: July 3, 2022 Date: July 3, 2022
 COLLEGE OF ADMINISTRATIVE AND FINANCIAL SCIENCES
3rdTri., AY 2021-2022
HWAC 2
MARKS

COURSE CODE BSIB622 COURSE TITLE INTERNATIONAL ACCOUNTING

SECTION TIME DAYS ROOM
STUDENT NAME ID NO. DATE

current exchange rate 370,000 0.110

Translation adjustment, Year 1
(positive) 7140

ASSIGNMENT
Use the template given above.
OUTPUT

Marking Scheme: 1 mark each correct answer x 30=30 MARKS.

RUBRIC /
MARKING
SCHEME

LEARNING ASSESSMENT/MARKING FACULTY/MARKER’S FEEDBACK

ITEM CILOs MARK MARKS
S AWARDED
1 C3 30
TOTAL 30

Prepared by : Reviewed / Checked: Approved by:

MA. CECILIA LAGARAS CPA. DM JAYENDIRA SANKAR, PhD VINODH NATARAJAN, Ph.D
Course Coordinator Dept. Head, BSIB Dean, CAFS
Date: July 3, 2022 Date: July 3, 2022 Date: July 3, 2022