ABC Corp. is a German subsidiary of a U.S. company.(post in chegg)

ABCs ending inventory is valued at the average cost for the last quarter of the year.

The following account balances are available for ABC Corp. for 2021:

Beginning inventory		20,000
Purchases		400,000
Ending inventory		15,000

4th quarter average, 2020	$	0.93	=		1
December 31, 2020		0.94	=		1
Average for 2021		0.96	=		1
4th quarter average, 2021		0.99	=		1
December 31, 2021		1.01	=		1

a.Compute the cost of goods sold for 2021 in U.S. dollars using the current rate method.

ABC Company, a Canadian subsidiary of a U.S. company, sold equipment costing 200,000 Canadian dollars with accumulated depreciation of 75,000 Canadian dollars for 140,000

Canadian dollars on March 1, 2021. The equipment was purchased on January 1, 2020. Relevant exchange rates for the Canadian dollars are as follows:

January 1, 2020	$	0.110
March 1, 2021		0.105
December 31, 2021		0.102
Average, 2021		0.106

a.The financial statements for ABC Corp. are translated by its U.S. parent.

b.What amount of gain or loss would be reported in its translated income statement under the current rate method?