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A U.S. company foreign subsidiary had these amounts in foreign currency units (FCU) in 2011: Cost of goods sold FCU 10, 000,000 Ending Inventory 500,000
A U.S. company foreign subsidiary had these amounts in foreign currency units (FCU) in 2011: Cost of goods sold FCU 10, 000,000 Ending Inventory 500,000 Beginning Inventory 200,000 The average exchange rate during 2011 was $0.80=FCU 1. The beginning inventory was acquired when the exchange rate was $1.00=FCU1. Ending inventory was acquired when the exchange rate was $0.75=FCU1. The exchange rate at December 31, 2011, was $0.70=FCU 1. Assuming that the foreign country is highly inflationary, at what amount should be foreign subsidiarys cost of goods sold be reflected in the U.S. dollar income statement? A. 7,815,000 B. 8,040,000 C. 8.065,000 D. 8,090,000
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