In 1995, Ajax Manufacturing's German subsidiary has the following balance sheet: Cash, marketable securities Accounts receivable Inventory (at market. Fixed Assets Total assets DM 250,000 1,000,000 2,700,000 5,100,000 ----------------- DM 9,050,000 Current liabilities Long-term debt Equity Total liabilities plus equity DM 750,000 3,400,000 4,900,000 --------------- DM 9,050,000 Suppose the DM appreciates from $0.70 to $0.76 during the period. 10.16 Under the current/noncurrent method, what is Ajax's translation gain (loss).? a) a gain of $294,000 b) a gain of $192,000 c) a loss of $174,000 d) a loss of $12,000

In 1995, Ajax Manufacturing's German subsidiary has the following balance sheet: Cash, marketable securities Accounts receivable Inventory (at market. Fixed Assets Total assets DM 250,000 1,000,000 2,700,000 5,100,000 ----------------- DM 9,050,000 Current liabilities Long-term debt Equity Total liabilities plus equity DM 750,000 3,400,000 4,900,000 --------------- DM 9,050,000 Suppose the DM appreciates from $0.70 to $0.76 during the period. 10.16 Under the current/noncurrent method, what is Ajax's translation gain (loss).? a) a gain of $294,000 b) a gain of $192,000 c) a loss of $174,000 d) a loss of $12,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter15: Financial Statement Analysis

Section: Chapter Questions

Problem 6MCQ

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The following information is to be used in answering the following question: TT Exports (TTE)Manufacturing's foreign subsidiary has the following balance sheet: Cash, marketable securities Accounts receivable Inventory (at market. Fixed Assets Total assets FC 250,000 1,000,000 2,700,000 5,100,000 ----------------- FC 9,050,000 Current liabilities Long-term debt Equity Total liabilities plus equity FC 750,000 3,400,000 4,900,000 --------------- FC 9,050,000 Suppose the FC appreciates from $0.70 to $0.75 during the period. Under the current rate method, what is TTEs translation gain (loss)? a. a loss of $192,000 b. a loss of $12,000 c. a gain of $294,000 d. a gain of $245,000
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