50.1K

Verified Solution

Link Copied!

1. A foreign subsidiary uses the first in first-out inventory method. The following inventory balances are given at December 31, 2018 in local currency units (LCU): Inventory at cost 80.000 LCU Inventory at net realizable value 105,000 LCU The following exchange rates are given for 2018: 4 quarter average, 2018 ........... ... ....$1.59 -1 LCU December 31, 2018 1.56-1LCU Compute the December 31, 2018, Inventory balance using the lower of cost of net realizable value method under the temporal method. 163,800. b. $127.200 c. $124.800 d $126,000. e $165,950 Answer questions 2 and 3 based on the following information Santo Company, a Spanish subsidiary of a US company, sold equipment costing 450.000 euros with accumulated depreciation of 168,750 euros for 315.000 euros on March 1, 2018. The equipment was purchased on January 1, 2017. Relevant exchange rates for the peso are as follows: January 1, 2017 51.03 1 March 1, 2018 1.04 December 31, 2018 106 - EL Average, 2015 1.09 The financial statements for Santos are translated by its U.S.parent. What amount of gain or loss would be reported in its translated income statement? 32,500 b $35,1000 $31.990.0 d $17,9125 $31,650.00 3. The financial statements for Santos are remeasured by its U.S. parent. What amount of gain or loss would be reported in its translated income statement? $32.530.0 b. $35.100.0 c. $31.590.0. d. $37,9125 c. $31,650.00 4. On March 8, 2018, Pigskin Co., a U.S. corporation sold inventory on credit to a British company Pigskin received a payment of 55,000 British pounds on April 8, 2018. The exchange rate was fl- $1.42 on March 8 and 1 -156 on April 8. What amount of foreign exchange gain or loss should be recognized?(round to the nearest dollar) S38,732 loss b. $38,732 gain c. $7,700 gain d. $7,700 loss e. No gain or loss should be recognized

Answer & Explanation Solved by verified expert

See Answer