Tristan Narvaja, S.A. (B).Tristan Narvaja, S.A., is the Uruguayan subsidiary of a U.S. manufacturing company....
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Tristan Narvaja, S.A. (B).Tristan Narvaja, S.A., is the Uruguayan subsidiary of a U.S. manufacturing company. Its balance sheet for January 1 is shown in the popup window.The January 1 exchange rate between the U.S. dollar and the peso Uruguayo ($U) is $U25/$. Determine Tristan Narvaja's contribution to the translation exposure of its parent on January 1, using the current rate method.
Assets Liabilities and Net Worth Cash 70,000 Current liabilities 20,000 Accounts receivable 140,000 Long-term debt 70,000 Inventory 110,000 Capital stock 270,000 Net plant & equipment 240,000 Retained earnings 200,000 560,000 560,000
a. Using the current rate method, what is Tristan Narvaja's contribution to the translation exposure of its parent on January 1st? $U___(Round to the nearest peso Uruguayo.)
b. What is Tristan Narvaja's contribution to its parent's translation loss if the exchange rate on December 31st is $U28/$? $__(Round to the nearest dollar.)
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