A 100 percent–owned foreign subsidiary’s trial balance consists of the accounts listed as follows. Which exchange rate—current, historical, or average—would be used to translate these accounts to parent currency assuming that the foreign currency is the functional currency? Which rates would be used if the parent currency were the functional currency?

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Trial Balance Accounts Cash Marketable securities (cost) Accounts receivable Inventory (market) Equipment Accumulated depreciation Prepaid expenses Goodwill Accounts payable Due to parent (denominated in dollars) Bonds payable Income taxes payable Deferred income taxes Common stock Premium on common stock Retained earnings Sales Purchases Cost of sales General and administrative expenses Selling expenses Depreciation Amortization of goodwill Income tax expense Intercompany interest expense