go to chapter 11 key to Chapter 3amp;4.doc

go to chapter 11 key to Chapter 3amp;4 导读：就爱阅读网友为您分享以下“key to Chapter 3amp;4”资讯，希望对您有所帮助，感谢您对92的支持! Chapter 3 SOLUTIONS TO SELECTED EXERCISES AND CASES IN CHAPTER 3 5. Gator Corporation (US): a. 2,000,000 DM x ($.70-$.65) = US$100,000 Loss b. Holdstet will report no gain/loss in its year-end income statement since the transaction is denominated in its home currency (DM). Case Study: Cupid?s Corner 1. Ms. Pidcu is correct since Singapore is the primary economic environment in which the subsidiary operates and generates cash flows. 2. If Angelica Corporation uses Singapore dollars as its functional currency, the company will translate its financial statements into US dollars using the current rate method. Under the current rate method translations gains and losses bypass the income statement by appearing as a separate line item in the balance sheet. If Angelica Corporation uses US dollars as the functional currency, financial statements are also converted into US dollars but under the temporal method. Under the temporal method, translation gains and losses are included in the income statement and thus affect the company?s earnings for the period. Another important difference is that under the current rate method fixed assets are translated using the year-end exchange rate while under the temporal rate method they are translated using the historical exchange rate. 3. The criteria for the choice of functional currency are broad enough to permit companies considerable discretion. However, in situations such as the one described in the case, it is reasonable to expect that the auditors would object to the company using the US dollar as the functional currency when all indications are that Singapore is the primary operating environment of the subsidiary. Case Study: Euro-Fusion 1. With the strengthening of the Euro in 2003, Coca-Cola?s Consolidated Statements of Income for 2003 will look better than 2002. With the weakening of t