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Reinforcement Drill 02 FxCy FS Translation
Reinforcement Drill 02 FxCy FS Translation
Jack Company, a subsidiary of Jill Corporation, began operations at the beginning of 2018. The functional
currency of Jack Company is the Italian Lira; the functional currency and reporting currency of Jill Corporation is
the Philippine Peso. The statement of financial position of Jack Company on January 1, 2018, showed land for
40,000 liras; building for 95,000 liras; machinery for 25,000 liras; long-term debt for 50,000 liras; and ordinary
share capital of 110,000 liras. A combined statement of income and retained earnings in lira for Jack Company
for 2018 is as follows:
Sales 300,000
Cost of goods sold 200,000
Operating expenses (including Depr. Expense of 12,000) 55,000
Profit 45,000
Beginning retained earnings -----
Dividends 12,500
Ending retained earnings 32,500
The statement of financial position for Jack Company in liras on December 31, 2018 is presented below.
Assets
Cash 9,500
Accounts receivable 25,000
Inventories 30,000
Land 40,000
Buildings, net 85,500
Machinery, net 22,500
Total assets 212,500
Additional ordinary shares (5,000 liras) was issued in June; dividends were declared and paid in November. The
exchange rate for 2018 are as follows:
REQUIRED: Translate (translation working papers) the financial statements of Jack Company into the
presentation currency which is Philippine peso.