Tristan Narvaja Based on the balance sheet in the text (p. 318), calculate Tristan Narvaja’s contribution to its parent’s translation loss if the exchange rate on December 31st is $U12/$, except for capital stocks and retained earnings for which it is $U15/$. Assume all Uruguayan peso ($U) accounts remain as they were at the beginning of the year. Determinate Montevideo's contribution to the translation exposure of its parent on January 1st, using the current rate method:
- Accounting net exposure (whole $U):
- Exchange rate translation exposure (whole $U):
Balance Sheet (thousands of pesos Uruguayo, $U)
Assets Liabilities and Net Worth
Cash $U60,000 Current liabilities $U30,000
Accounts receivable120,000 Long-term debt 90,000
Inventory 120,000 Capital stock 300,000
Net plant &
equipment 240,000 Retained earnings $U540,000
$U540,000 120,000