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Company ABC is the parent of several subsidiaries across the world. One of those entities is Foreign Co., which is located in a country with

Company ABC is the parent of several subsidiaries across the world. One of those entities is Foreign Co., which is located in a country with significant swings in the domestic currency relative to the US dollar. Assume you are tasked to find out how fluctuations in the exchange rate affect Foreign Co.s financial ratios under the current and temporal methods. Below is the partial trial balance for ForeignCo., as of December 31, 2022 (for brevity, equity accounts are omitted). Accounts with a credit balance are in parentheses. To assess the currency fluctuation, you decide to perform a sensitivity analysis (i.e., a what-if analysis) of the companys financial data under two scenarios: currency appreciation (scenario A) and currency depreciation (scenario B).

Foreign Co.

Trial Balance

December 31, 2022

FCUs*

Cash

10,000

Accounts Receivable

25,000

Inventory

50,000

Equipment

100,000

Accumulated Depreciation

(10,000)

Accounts Payable

(20,000)

Long-term Debt

(60,000)

Sales Revenue

(100,000)

Cost of Goods Sold

40,000

Salary Expense

30,000

Rent Expense

14,000

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