accounts are listed below for a foreign subsidiary that maintains its books in i

ID: 2568046 • Letter: A

Question

accounts are listed below for a foreign subsidiary that maintains its books in its local currency. The equity interest in the subsidiary was acquired in a purchase transaction. in the space provided, indicate the exchange rate that would be used to translate the accounts into dollars assuming the functional currency was identified (a) as the US dollar and (b) as the foreign entity's local currency. Use the following letters to identify the exchange rate:

H- historical exchange rate, C- current exchange rate, A- average exchange rate.

US Dollar Local Dollar Bonds Payable Office Supplies Dividends Declared Common Stock Additional Paid in Capital inventory carried at cost short term notes payable accumulated depreciation cash marketable securities cost of goods sold sales accounts receivable depreciation expense income tax expense

Explanation / Answer

US Dollar

Local Dollar

Bonds Payable

Office Supplies

Dividends Declared

Common Stock

Additional Paid in Capital

Inventory carried at Cost

Short Term Notes Payable

Accumulated Depreciation

Cash

Marketable Securities

Cost of Goods Sold

Sales

Accounts Receivable

Depreciation Expense

Income Tax Expense