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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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