An American firm owns 100% of a German firm that had the following transactions occur relative to their equipment account:
The following exchange rates could be relevant:
Required:
Assuming that the U.S. dollar is the functional currency and that the German firm uses straight-line depreciation over a 5-year period with a 10% salvage value, determine the following for remeasurement purposes:
a.
The value of the equipment account on December 31, 20X6.
b.
The value of the depreciation expense for 20X6.
c.
The amount of the gain or loss resulting from the July 1, 20X6, sale.

Question

An American firm owns 100% of a German firm that had the following transactions occur relative to their equipment account:
  The following exchange rates could be relevant:
  Required:
Assuming that the U.S. dollar is the functional currency and that the German firm uses straight-line depreciation over a 5-year period with a 10% salvage value, determine the following for remeasurement purposes: 
a.
The value of the equipment account on December 31, 20X6.
b.
The value of the depreciation expense for 20X6.
c.
The amount of the gain or loss resulting from the July 1, 20X6, sale.

Quizplus · Accepted Answer

The Answer of An American firm owns 100% of a German firm that had the following transactions occur relative to their equipment account:
  The following exchange rates could be relevant:
  Required:
Assuming that the U.S. dollar is the functional currency and that the German firm uses straight-line depreciation over a 5-year period with a 10% salvage value, determine the following for remeasurement purposes: 
a.
The value of the equipment account on December 31, 20X6.
b.
The value of the depreciation expense for 20X6.
c.
The amount of the gain or loss resulting from the July 1, 20X6, sale.

An American Firm Owns 100% of a German Firm That