Hawk Company sold inventory to United Ltd., an English subsidiary. The goods cost Hawk ($ 8,000) and
Question:
Hawk Company sold inventory to United Ltd., an English subsidiary. The goods cost Hawk \(\$ 8,000\) and were sold to United for \(\$ 12,000\) on November 27, payable in British pounds. The goods are still on hand at the end of the year on December 31. The British pound ( \(£\) ) is the functional currency of the English subsidiary. The exchange rates were:
\section*{Required}
a. At what dollar amount is the ending inventory shown in the trial balance of the consolidated workpaper?
b. What amount is eliminated for the unrealized intercompany gross profit, and at what amount is the inventory shown on the consolidated balance sheet?
" Indicates that the item relates to "Additional Considerations."
Step by Step Answer:
Advanced Financial Accounting
ISBN: 9780072444124
5th Edition
Authors: Richard E. Baker, Valdean C. Lembke, Thomas E. King