Question
A Clarke Corporation subsidiary buys marketable equity securities and inventory on April 1, 2017, for 100,000 won each. It pays for both items on June
A Clarke Corporation subsidiary buys marketable equity securities and inventory on April 1, 2017, for 100,000 won each. It pays for both items on June 1, 2017, and they are still on hand at year-end. Inventory is carried at cost under the lower-of-cost-or-net realizable rule. Currency exchange rates for 1 won follow:
| January 1, 2017 | $ | 0.21 | = | 1 | won |
| April 1, 2017 | 0.22 | = | 1 | ||
| June 1, 2017 | 0.23 | = | 1 | ||
| December 31, 2017 | 0.25 | = | 1 | ||
Assume that the U.S. dollar is the subsidiarys functional currency. What balances does a consolidated balance sheet report as of December 31, 2017?
Multiple Choice
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Marketable equity securities = $25,000 and Inventory = $25,000.
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Marketable equity securities = $23,000 and Inventory = $23,000.
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Marketable equity securities = $22,000 and Inventory = $22,000.
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Marketable equity securities = $25,000 and Inventory = $22,000.
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
