Question
Certain balance sheet accounts of a foreign subsidiary of Orchid Company have been stated in U.S. dollars as follows: Stated at Current Rates Historical Rates
Certain balance sheet accounts of a foreign subsidiary of Orchid Company have been stated in U.S. dollars as follows:
Stated at | |||||||
Current Rates | Historical Rates | ||||||
Accounts receivable, current | $ | 276,000 | $ | 296,000 | |||
Accounts receivable, long term | 128,000 | 135,000 | |||||
Land | 64,000 | 67,000 | |||||
Patents | 92,000 | 97,000 | |||||
$ | 560,000 | $ | 595,000 | ||||
This subsidiarys functional currency is the U.S. dollar. What total should Orchids balance sheet include for the preceding items?
2.
Newberry, Inc., whose reporting currency is the U.S. dollar, has a subsidiary in Argentina, whose functional currency also is the U.S. dollar. The subsidiary acquires inventory on credit on November 1, 2020, for 300,000 pesos that is sold on January 17, 2021, for 354,000 pesos. The subsidiary pays for the inventory on January 31, 2021. Currency exchange rates are as follows:
November 1, 2020 | $ | 0.62 | = | 1 | peso |
December 31, 2020 | 0.63 | = | 1 | ||
January 17, 2021 | 0.64 | = | 1 | ||
January 31, 2021 | 0.65 | = | 1 | ||
What amount does Newberrys consolidated balance sheet report for this inventory at December 31, 2020?
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