Read and review the selected case study from the required text, and answer the analysis questions.
After reviewing the background section of the Columbia Corporation in your textbook, provide answers to the following questions:
Translate Swobodas financial statements into U.S. dollars in accordance with U.S. GAAP at December 31, Year 2:
- Assuming the Polish zloty is the functional currency. (The December 31, Year 1, retained earnings that appeared in Swobodas translated financial statements was $56,250. The December 31, Year 1, cumulative translation adjustment that appeared in Swobodas translated balance sheet was negative $506,250.)
- Assuming the U.S. dollar is the functional currency. (The December 31, Year 1, retained earnings that appeared in Swobodas remeasured financial statements was $882,500.)
- The same as (1) except Swoboda has no long-term debt. Instead, Swoboda has common stock of PLN 10,000,000 and additional paid-in capital of PLN 25,000,000. The December 31, Year 1, retained earnings that appeared in Swobodas remeasured financial statements was negative $367,500.
- Explain why the sign of the translation adjustments in (1), (2), and (3) is positive or negative.
From: Doupnik, T., & Perera, H. (2014). International accounting (4th ed.) (p. 22). New York, NY: McGraw-Hill Education.
- Each answer is to be clear and concise, and students will lose points for improper grammar, punctuation, and spelling.
- Journal articles and books must be referenced according to current APA style (the library has a copy of the APA Manual).