JJ Corp, located in Germany, is a foreign subsidiary of King Corp. located in th

Question

JJ Corp, located in Germany, is a foreign subsidiary of King Corp. located in the U.S.. JJ's functional currency is U.S. dollar and JJ uses the temporal method to translate the financial statements. At the end of the 2015 accounting period (1/1-12/31/2015), JJ has the following information: Beginning inventory: 50,000 Euro All purchases for the 2015 period: 430,000 Euro Ending inventory:12,000 Euro the exchange rates per 1 Euro for the 2015 are as follows: 1/1/2015 .......$1.40 Average for 2015......$1.28 Average for the month of December 2015.........$1.25 12/31/2015..............$1.22 What is is the cost of goods sold reported on the translated 2015 I/S?

Explanation / Answer

JJ Corporation All Amounts reported in $ Particulars Value Exchange Converted in Euro Rate Amount in $ Opening Inventory 50000 1.4 70000 Purchases 430000 1.28 550400 480000 620400 Closing Inventory 12000 1.22 14640 Cost of Goods Sold 468000 605760

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