loader  Loading... Please wait...

Question(s) / Instruction(s):

A U.S. companys foreign subsidiary had the following amounts in stickles (§) in 2011:

 

Cost of goods sold                           $12,000,000

Ending inventory                                  600,000

Beginning inventory                           240,000

   The average exchange rate during 2011 was §1 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The exchange rate at December 31, 2011 was §1 = $.84. Assuming that the foreign country had a highly inflationary economy, at what amount should the foreign subsidiarys cost of goods sold have been reflected in the 2011 U.S. dollar income statement?

A.            $11,253,600.

B.            $11,577,600.

C.            $11,649,600.

D.            $11,613,600.

E.            $11,523,600.

 

12. A U.S. companys foreign subsidiary had the following amounts in stickles (§), the functional currency, in 2011:

Cost of goods sold           (Stickles) 12,000,000

Ending inventory                                   600,000

Beginning inventory                            240,000

The average exchange rate during 2011 was §1 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The exchange rate at December 31, 2011 was §1 = $.84. At what amount should the foreign subsidiarys cost of goods sold have been reflected in the 2011 U.S. dollar income statement?

A.            $11,253,600.

B.            $11,577,600.

C.            $11,520,000.

D.            $11,613,600.

E.            $11,523,600.

 

13. A U.S. companys foreign subsidiary had the following amounts in stickles (§), the functional currency, in 2011:

 Cost of goods sold                                          $12,000,000

Ending inventory                                                  600,000

Beginning inventory                                           240,000

The average exchange rate during 2011 was §1 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The exchange rate at December 31, 2011 was §1 = $.84. At what amount should the foreign subsidiarys purchases have been reflected in the 2011 U.S. dollar income statement?

A.            $11,865,600.

B.            $11,577,600.

C.            $11,520,000.

D.            $11,613,600.

E.            $11,523,600.

 

14. Compute the cost of goods sold for 2011 in U.S. dollars using the temporal method.

A.            $376,650.

B.            $387,750.

C.            $388,800.

D.            $400,950.

E.            $409,050.

 

15. Compute the cost of goods sold for 2011 in U.S. dollars using the current rate method.

A.            $376,550.

B.            $387,750.

C.            $388,800.

D.            $400,950.

E.            $409,050.

 

16. Compute ending inventory for 2011 under the temporal method.

A.            $13,950.

B.            $14,100.

C.            $14,400.

D.            $14,850.

E.            $15,150.

 

17. Compute ending inventory for 2011 under the current rate method.

A.            $13,950.

B.            $14,100.

C.            $14,400.

D.            $14,850.

E.            $15,150.

 

18.  A foreign subsidiary uses the first-in first-out inventory method. The following inventory balances are given at December 31, 2011 in local currency units (LCU):

Inventory at cost                                              320000 LCU

Inventory at replacement cost                   300000

Inventory at net realizable value                               420000

Inventory at net realizable value

Less normal profit margin                             400000

The following exchange rates are given for 2011

4th quarter average,2011                             $1.43=1 LCU

December 31, 2011                                         $1.42=1 LCU

Compute the December 31, 2011, inventory balance using the lower of cost or market method under the temporal method.

A.            $429,000.

B.            $457,600.

C.            $596,400.

D.            $568,000.

E.            $426,000.

 

19. Compute the December 31, 2011, inventory balance using the current rate method.

A.            $454,400.

B.            $457,600.

C.            $596,400.

D.            $568,000.

E.            $426,000.

 

20. Perez Company, a Mexican subsidiary of a U.S. company, sold equipment costing 200,000 pesos with accumulated depreciation of 75,000 pesos for 140,000 pesos on March 1, 2011. The equipment was purchased on January 1, 2010. Relevant exchange rates for the peso are as follows:

   Janurary 1, 2010                             $.11

March 1 ,2011                                    .106

December 31, 2011                         .102

Average, 2011                                   .105

 

The financial statements for Perez are translated by its U.S. parent. What amount of gain or loss would be reported in its translated income statement?

A.            $1,530.

B.            $1,575.

C.            $1,590.

D.            $1,090.

E.            $1,650.

 

21           The financial statements for Perez are remeasured by its U.S. parent. What amount of gain or loss would be reported in its translated income statement?

A.            $1,530.

B.            $1,575.

C.            $1590.

D.            $1,090.

E.            $1,650.

 

Find Similar Answers by Subject


Student Reviews

Rate and review your solution! (Please rate on a Scale of 1 - 5. Top Rating is 5.)


Expert's Answer
Download Solution:
$2.00

This solution includes:

  • Plain text
  • Cited sources when necessary
  • Attached file(s)
  • Solution Document(s)



Reach Us

408-538-8534

20-3582-4059

39-008-4233

+1-408-904-6494