_____ Pemex's Swiss subsidiary, Semex, had stockholders' equity of 500,000 Swiss francs on 1/1/06. For 2006, Semex reported net income of 100,000 Swiss francs (which was earned evenly during the year). On 1/2/06, Semex declared and paid a dividend of 20,000 Swiss francs. Pemex uses the current rate method of translation. Direct exchange rate information follows:
What is the effect of the 2006 exchange rate change?
A) $(48,000)
B) $(50,000)
C) $(53,000)
D) $(55,000)
E) None of the above.

Question

_____ Pemex's Swiss subsidiary, Semex, had stockholders' equity of 500,000 Swiss francs on 1/1/06. For 2006, Semex reported net income of 100,000 Swiss francs (which was earned evenly during the year). On 1/2/06, Semex declared and paid a dividend of 20,000 Swiss francs. Pemex uses the current rate method of translation. Direct exchange rate information follows:
 What is the effect of the 2006 exchange rate change?
A) $(48,000) 
B) $(50,000) 
C) $(53,000) 
D) $(55,000) 
E) None of the above.

Quizplus · Accepted Answer

The Answer of _____ Pemex's Swiss subsidiary, Semex, had stockholders' equity of 500,000 Swiss francs on 1/1/06. For 2006, Semex reported net income of 100,000 Swiss francs (which was earned evenly during the year). On 1/2/06, Semex declared and paid a dividend of 20,000 Swiss francs. Pemex uses the current rate method of translation. Direct exchange rate information follows:
 What is the effect of the 2006 exchange rate change?
A) $(48,000) 
B) $(50,000) 
C) $(53,000) 
D) $(55,000) 
E) None of the above.

_____ Pemex's Swiss Subsidiary, Semex, Had Stockholders' Equity of 500,000