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A U.S. companys foreign subsidiary had these amounts in foreign currency units (FCU) in 2015 Cost of goods sold FCU 13,000,000 Ending inventory 340,000 Beginning
A U.S. companys foreign subsidiary had these amounts in foreign currency units (FCU) in 2015 |
Cost of goods sold | FCU | 13,000,000 |
Ending inventory | 340,000 | |
Beginning inventory | 240,000 | |
The average exchange rate during 2015 was $2.30 = FCU 1. The beginning inventory was acquired when the exchange rate was $2.50 = FCU 1. Ending inventory was acquired when the exchange rate was $2.25 = FCU 1. The exchange rate at December 31, 2015, was $2.20 = FCU 1. Assuming that the foreign country is highly inflationary, at what amount should the foreign subsidiarys cost of goods sold be reflected in the U.S. dollar income statement? |
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