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23. A U.S. company's foreign subsidiary had the following amounts in stickles (§),
the functional currency, in 2011:
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 nation for the subsidiary had a highly
inflationary economy, at what amount should that foreign subsidiary's purchases have
been reflected in the 2011 U.S. dollar income statement?
24. A historical exchange rate for common stock of a foreign subsidiary is best
described as
25. A net asset balance sheet exposure exists and the foreign currency appreciates.
Which of the following statements is true?
26. A net asset balance sheet exposure exists and the foreign currency depreciates.
Which of the following statements is true?
27. A net liability balance sheet exposure exists and the foreign currency
appreciates. Which of the following statements is true?
28. A net liability balance sheet exposure exists and the foreign currency
depreciates. Which of the following statements is true?
29. Which method of translating a foreign subsidiary's financial statements is
correct?
30. Which method of remeasuring a foreign subsidiary's financial statements is
correct?
31. Under the temporal method, inventory at market would be remeasured at what
rate?
32. Under the current rate method, inventory at market would be translated at what
rate?
33. Under the temporal method, common stock would be remeasured at what rate?
34. Under the current rate method, common stock would be translated at what
rate?
35. Under the current rate method, property, plant & equipment would be
translated at what rate?
36. Under the temporal method, property, plant & equipment would be remeasured
at what rate?
37. Under the current rate method, retained earnings would be translated at what
rate?
38. Under the temporal method, retained earnings would be remeasured at what
rate?
39. Under the current rate method, depreciation expense would be translated at
what rate?
40. Under the temporal method, depreciation expense would be remeasured at
what rate?
41. Under the temporal method, how would cost of goods sold be remeasured?
42. Under the current rate method, how would cost of goods sold be translated?
43. Where is the disposition of a translation loss reported in the parent company's
financial statements?
44. Where is the disposition of a remeasurement gain or loss reported in the parent
company's financial statements?
45. A highly inflationary economy is defined as
46. If a subsidiary is operating in a highly inflationary economy, how are the
financial statements to be restated?
47. When consolidating a foreign subsidiary, which of the following statements is
true?
48. When preparing a consolidating statement of cash flows, which of the
following statements is false?
49. When preparing a consolidation worksheet for a parent and its foreign
subsidiary accounted for under the equity method, which of the following statements
is false?
50. Esposito is an Italian subsidiary of a U.S. company.
Esposito's ending inventory is valued at the average cost for the last quarter of the
year.
The following account balances are available for Esposito for 2011:
Compute the cost of goods sold for 2011 in U.S. dollars using the temporal method.
