1. Horan Ltd, a foreign subsidiary of Styles Corp., has written down its inventory to net realizable value under the lower of cost or net realizable value rule. When consolidating Horan's balance sheet into Styles' balance sheet using the current rate method, what exchange rate should be used for the inventory?

a. Historical rate b. Current rate c. Average rate d. Cannot be determined with the information given

2. What exchange rate should be used to translate the common stock of Horan Ltd, a foreign subsidiary of Styles Corp., when consolidating the financial statements using the current rate method?

a. Current rate b. Historical rate c. Average rate d. Cannot be determined with the information given