Question
EXERCISE 13-1 Identifying the Exchange Rate Accounts are listed below for a foreign subsidiary that maintains its books in its local currency. The equity interest
EXERCISE 13-1 Identifying the Exchange Rate
Accounts are listed below for a foreign subsidiary that maintains its books in its local currency. The equity interest in the subsidiary was acquired in a purchase transaction. In the space provided, indicate the exchange rate that would be used to translate the accounts into dollars assuming that the functional currency was identified (a) as the U.S. dollar and (b) as the foreign entitys local currency.
Use the following letters to identify the exchange rate:
Hhistorical exchange rate
Ccurrent exchange rate
Aaverage exchange rate for the current period
Exchange Rate if the
Functional Currency Is:
Account U.S. Dollar Local Currency
Cash ___ __________
Accounts receivable ____ __________
Inventory carried at cost _____ __________
Inventory carried at market _____ __________
Prepaid rent _____ __________
Property, plant, and equipment _____ __________
Goodwill _____ __________
Accounts payable _____ __________
Bonds payable _____ __________
Unamortized premium on bonds payable _____ __________
Preferred stock carried at issuance price _____ __________
Common stock _____ __________
Sales ____ __________
Cost of goods sold _____ __________
Depreciation expense _____ __________
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