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Translation of Foreign Currency - SlayersZ - 03-04-2009
Canadian Accounting
I'm stuck on a question where a Canadian company owns a Danish Retail company called Olaf. The Canadian company acquired 100% of voting shares of Olaf at their book value. The company was acquired on December 31, 2005.
The sales and inventory purchases occurred uniformly over the year. The other Expenses include Kr6000 of bad debt, which is credit to the allowance for doubtful accounts on December 31, 2007. Also, on that date, Kr9000 were written off against the allowance for doubtful accounts. The remainder of the other Expenses occurred Uniformly.
The long-term note payable was issued on January 1, 2006, and is due on January 1, 2007.
My question is, what does the bad debt expense and writes off have to do with calculating the change in net monetary balance. Second, long-term note payable is suppose to be paid off on January 1, 2007, but there is still a balance on long-term notes payable on Olaf's December 31, 2007 Trial balance. The question does not state any additional notes payable, so I don't know why there is still a balance ( Olaf Company is classified as a integrated foreign operation.