EXAMINATION

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Program: VNU Lecturer’s
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Course Code: INS3017
name
Course Title: International
Accounting
Level: UG
Date:
Time allowed: 90 minutes
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Date:
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Instructions to students:
- Closed book examination.
- Students are NOT permitted to retain this examination paper.
1. Student name:

(written in English and in Vietnamese)

2. Date of birth:

3. Student ID No:

4. Class:

5. Invigilator’s signature:

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PART I – TRUE/FALSE (1.5 points)

(0.3 points for each question)

1. Sales revenue is normally translated the same way under both the current rate and
temporal methods.
2. Market-based transfer price is the result of negotiation between buyer and seller and
may be unrelated to either cost or market value.
3. Appreciation in a foreign currency will result in a foreign exchange loss on a foreign
currency receivable and a foreign exchange gain on a foreign currency payable
4. The two primary taxes imposed on profits earned by corporations in international
trade are Withholding tax and Corporate income tax.
5. Downstream transfers go from subsidiary to parent, while upstream transfers are from
parent to subsidiary.

PART II- MULTIPLE CHOICE QUESTIONS (1.5 points)

(0.3 points for each question)

1. “Today’s price for purchasing or selling a foreign currency for some future date” is:
A. Strike price C. Forward rate
B. Spot rate D. Exchange rate

2. Foreign currency forward contract:

A. gives the obligation, but not the right, to exchange foreign currency at a future date.
B. gives the right, but not the obligation, to exchange foreign currency at a future date.
C. gives the right, but not the obligation, to exchange foreign currency today.
D. gives the obligation, but not the right, to exchange foreign currency today.

3. The basis for taxation are:

A. Source of income, Citizenship, and Tax Treaty
B. Citizenship, Source of income, and Residence
C. Residence, Citizenship, and Tax Treaty
D. Source of income, Residence, and Tax Treaty

4. Which of the following is not a method commonly used for establishing transfer
prices?
A. Cost-based transfer price C. Market-based transfer price
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B. Negotiated price D. Industrywide transfer price

5. Which one is objective of international transfer pricing?

A. Performance evaluation systems
B. Cost minimization
C. Both A and B are correct
D. Both A and B are incorrect
PART III. PROBLEM ANALYSIS (2.5 points)
Brighten Corporation is an US company. It made a purchase for 140,000 Japanese Yen from
a Japanese supplier on Oct 15, Year 1. Payment will be made on Jan 15, Year 2. Brighten
Corporation has the accounting year ended Dec 31. The following exchange rates apply:

Date Exchange rate

Oct15, Year 1 14 Japanese Yen = 1 USD

Dec 31, Year 1 14.1 Japanese Yen = 1 USD
Jan 15, Year 2 14.3 Japanese Yen = 1 USD
Required:
1.Prepare journal entry for Brighten Corporation in the following date (2 points)
(a) Oct 15, Year 1
(b) Dec 31, Year 1
(c) Jan 15, Year 2
2. In above case, does the USD depreciate or appreciate against Japanese Yen? (0.5 points)

Dr. ( Assets tăng), (Liability nợ giảm) (Expense tăng) (Income bị giảm : Loss)
Cr (Assets giảm ) (Liability tăng) (Expense giảm ) (Imcome tăng : Gain)

1.
Vào ngày mua: 15th Oct, Y1
R: 14 yen= $1 => 140,0000Y= ??? 10,000 USD
Dr. Purchase $10,000
Cr. Account Payable 10,000
Ngày kết thúc báo cáo tài chính : 31st Dec Y1
R: 14.1 Y =$1 => 140,000 Y = ???? 9,929.08 USD
Dr. Account Payable $70.92
Cr. Foreign exchange Gain (10,000- 9,929.08) 70.92
Ngày payment : Jan 15, Y2
R: 14.3 Y= 1USD , 140,000Y =???? 9,790.21 USD
Dr. Account Payable $ 9,929.08
Cr. Foreign exchange Gain $138.87
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Cr. Cash $ 9,790.21
2. USD appreciate against Japanese Yen (Yen đang mất giá hơn USD)
Because foreign exchange makes decrease the amount of domestic currency that it
needs to pay.

Dr= Cr
9,929.08 =9,790.21 + ???

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PART IV. TRANSLATION OF FINANCIAL STATEMENTS (4.5 points)
Marybeth Company (a US company) established a subsidiary in Vietnam on January 1, 2022,
by investing $1,000,000. The subsidiary’s opening balance sheet (in VND) was as follows:

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 Balance Sheet
January 1, 2022
VND VND

Cash 18,200,000,000

Inventory 5,000,000,000 Capital Stock 23,200,000,000

Total Assets 23,200,000,000 Total Liabilities and Equity 23,200,000,000

Relevant VND per USD exchange rate for 2022 are as follows:

Date Exchange rate

Jan 1, 2022 23,200 VND = 1 USD

Average for 2022 23,250 VND = 1 USD
Rate when PPE were acquired on Jan 15, 2022 23,300 VND = 1 USD
Rate when dividends were declared on December 1, 2022 23,330 VND = 1 USD
Average for the month of December, 2022 23,350 VND = 1 USD
December 31, 2022 23,380 VND = 1 USD

The subsidiary’s financial statements for the year ended December 31, 2022 are as follows.
Ending inventory was acquired evenly throughout the month of December
Required: Translate the Vietnamese subsidiary’s financial statements into USD using
Current rate method.

Income statement
for 2022
VND Translation Rate USD
Sales 46,000,000,000
Less: Costs of goods sold 28,500,000,000
Less: Selling and
5,000,000,000
administrative expenses
Less: Depreciation expense 600,000,000
Less: Interest expense 250,000,000
Income before taxes 11,650,000,000 Calculation
Less: Income tax 2,330,000,000
Net income 9,320,000,000 Calculation

Retained earnings statement

for 2022

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 VND Translation Rate USD
Retained Earnings, 1/1/2022 0
From Income
9,320,000,000
Add: Net Income Statement

Less: Dividends 2,500,000,000

Calculation
Retained Earnings, 31/12/2022 6,820,000,000

Balance sheet
December 31, 2022

VND Translation Rate USD

Assets
Cash 15,360,000,000 23.38
9,360,00
Account Receivable 0,000
6,800,00
Inventory 0,000
12,000,00
PPE 0,000
600,000,
Less: Accumulated
000
Depreciation
15
Total Assets 42,920,000,000
Liabilities and Equity
5,900,00
Account Payable 0,000
7,000,00
Long-term Debt 0,000
23,200,00
Capital Stock 0,000
From Retained 6
6,820,000,000
Retained Earnings Earnings Statement
Cumulative translation Calculation 5
adjustment
15
42,920,000,000
Total Liabilities and Equity

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