Question
A subsidiary of Reynolds Inc., a U.S. company, was located in a foreign country. The local currency of this subsidiary was the Euro () while
A subsidiary of Reynolds Inc., a U.S. company, was located in a foreign country. The local currency of this subsidiary was the Euro () while the functional currency of this subsidiary was the U.S. dollar. The subsidiary acquired Equipment A on January 1, 2018, for 250,000. Depreciation expense associated with Equipment A was 25,000 per year. On January 1, 2020, the subsidiary acquired Equipment B for 150,000 and Equipment B had associated depreciation expense of 10,000. The subsidiary owned no other depreciable assets. Currency exchange rates between the U.S. dollar and the Euro were as follows:
January 1, 2018 | 1 | = | $ | 1.20 | |
December 31, 2018 | 1 | = | $ | 1.14 | |
2018 Average | 1 | = | $ | 1.18 | |
January 1, 2019 | 1 | = | $ | 1.15 | |
December 31, 2019 | 1 | = | $ | 1.21 | |
2019 Average | 1 | = | $ | 1.18 | |
January 1, 2020 | 1 | = | $ | 1.26 | |
December 31, 2020 | 1 | = | $ | 1.30 | |
2020 Average | 1 | = | $ | 1.28 | |
What amount would have been reported for total equipment owned by the subsidiary in Reynoldss consolidated balance sheet at December 31, 2018?
Multiple Choice
$285,000.
$456,000.
$295,000.
$300,000.
$472,000.
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