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Question: The Isle of Palms Company (IOP), a


The Isle of Palms Company (IOP), a U.S.-based entity, has a wholly owned subsidiary in Israel that has been determined as having the Israeli shekel (ILS) as its functional currency. On October 1, 2019, the Israeli subsidiary borrowed 500,000 Swiss francs (CHF) from a bank in Geneva for two years at an interest rate of 5 percent per year. The note payable and accrued interest are payable at the date of maturity. On December 31, 2020, the Israeli subsidiary has the following foreign currency balances on its books:



The Isle of Palms Company (IOP), a U.S-1

Relevant exchange rates between the Israeli shekel (ILS) and Swiss franc (CHF), and between the U.S. dollar (USD) and Israeli shekel (ILS) follow:



The Isle of Palms Company (IOP), a U.S-2

a. Determine the Israeli shekel amounts at which the Swiss franc balances should be reported on the Israel subsidiary’s December 31, 2020, trial balance.
b. Determine the U.S. dollar amounts at which the Swiss franc balances should be included in IOP’s 2020 consolidated financial statements.

2.99

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