ACC 407 International Accounting Foreign Currency Transactions part 2 Exercise 1 Lecture Exercises The Year 1 financial statements of the Brazilian subsidiary of Artemis corporation (a Canadian company) revealed the following: Beginning Inventory Brazilian Reals (BRL) 100,000 500,000 150,000 450,000 Purchases Ending Inventory Cost of goods sold Canadian dollars (C$) exchange rates for 1BRL as follows: January 1, Y1 Average, Y1 December 31, Y 1 C$0.45 0.42 0.38 The beginning inventory was acquired in the last quarter of the previous year when the exchange rate was C$0.5= BRL 1; ending inventory was acquired in the last quarter of the current year when the exchange rate was C$0.4 BRL. Required: 1) Assuming that the current rate method is the appropriate method of translation, determine the amounts at which the Brazilian subsidiary ending inventory and cost of goods sold should be included in the Artemis's Y1 consolidated income statements. 2) Assuming that the temporal method is the appropriate method of translation, determine the amounts at which the Brazilian subsidiary ending inventory and cost of goods sold should be included in the Artemis's Y1 consolidated income statements.