Juarez, SA Temporal Method

Income Statement -2010

Exchange
Peso Rate USD
Sales 20,000 0.095 1,900
Cost of goods sold (14,000) Sched. A (1,343)
Gross profit 6,000 557
S, G & A (2,500) 0.095 (238)
Depreciation expense (1,000) 0.1 (100)
Interest expense (500) 0.095 (48)
Remeasurement gain (loss) - below 101
Income before tax 2,000 272
Income taxes (500) 0.095 (47)
Net income 1,500 225

Balance Sheet as at 31 December 2010

Cash 1,000 0.08 80
Account Receivables 2,000 0.08 160
Inventory 2,500 0.09 225
Fixed assets 8,000 0.1 800
Less: accumulated depreciation (1,000) 0.1 (100)
Total assets 12,500 1,165

Accounts payable 2,000 0.08 160

Long-term debt 6,000 0.08 480
Capital stock 3,000 0.1 300
Retained earnings 1,500 225
Total liabilities and stockholders' equity 12,500 1,165
 Schedule A. Exchange
Calculation of cost of goods sold ZAR Rate USD
Beginning inventory - -
Purchases 16,500 0.095 1,568
Ending inventory (2,500) 0.09 (225)
Cost of goods sold 14,000 1,343

Calculation of remeasurement gain (loss)

Exchange
ZAR Rate USD
Net monetary liabilities, 1/1/10 (5,000) 0.1 (500)
Increase in monetary assets
Sales 20,000 0.095 1,900
Decrease in monetary assets
Purchases of inventory (16,500) 0.095 (1,568)
S, G & A (2,500) 0.095 (238)
Interest expense (500) 0.095 (48)
Income taxes (500) 0.095 (47)

Net monetary liabilities, 31/12/10 (5,000) (501)

Net monetary liabilities, 31/12/10 at
current exchange rate (5,000) 0.08 (400)
Remeasurement gain (101)