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Problem 2. Manila company purchased merchandise for 300,000 pounds from a vendor
in London on November 30, 2022. Payment in British pounds was due on January 30,
2023. The exchange rates for the British pounds were as follows:
November 30, 2022
Sports rate
$1.65
$1.62
30-day rate
1.64
1.59
60-day rate
1.63
1.56
In its December 31, 2022 income statement, what is the amount to be reported by Manila
Company as foreign exchange difference?
A. P9,000 gain
B. P3,367 loss
C. P3,367 gain
D. P9,000 loss
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Problem 3. The following are taken from the records of Elite imports company, a foreign
subsidiary in New Zealand.
NZ dollar
Total Assets
12/31/15
146,000
Total Liabilities
12/31/15
45,000
Common Stock
12/31/15
60,000
Retained Earnings
01/01/15
29,000
2015
15,000
12/31/15
3,000
Net Income
Dividends Declared
Exchange rates:
Current rate
P10
Historical rate
11
12
Exchange Rates
375,000
P8.60
75,000
8.55
25,000
8.54
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$1.62 : P1
$1.56 : P1
$1.60 : P1
Average rate for the period from September 10 to December 31, 2015
$1.58 : P1
What fair value adjustment is required to the carrying amount of land in the consolidate
Statement of financial position?
A. P30,864
B. P31,250
C. P32,051
D. P31,646
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