Mazaya firm in Saudi Arabia was acquired by a Kuwaiti Parent Company on January 1, 2007. Selected account balances are available for the year ended December 31, 2008, and are stated in Saudi Riyal, the local currency of the Saudi Subsidiary

Sales that occurred evenly during 2008: 800,000 Saudi Riyals

Purchases that occurred evenly during 2008 during 2008: 120,000 Saudi Riyals

Beginning Inventory (purchased on October 1, 2007) 20,000 Saudi Riyals

Ending Inventory (purchased on December 1, 2008) 40,000 Saudi Riyal and valued at cost using lower of cost or market where current market value is 70,000 Saudi Riyals

Equipment carried at cost (purchased on January 1, 2007) 180,000 Saudi Riyals

Dividends (declared and paid on September 1, 2008) 40,000 Saudi Riyals

Accumulated depreciation Equipment 90,000 Saudi Riyals

Depreciation expense for Equipment: 18,000 Saudi Riyals

Relevant exchange rates are given below:

January 1, 2007: 1 Saudi Riyal= 0.250 KD

October 1,2007: 1 Saudi Riyal= 0.225 KD

January 1, 2008: 1 Saudi Riyal= 0.2125

December 1, 2008: 1 Saudi Riyal= 0.190 KD

September 1, 2008: 1 Saudi Riyal= 0.185 KD

December 31, 2008: 1 Saudi Riyal= 0.1825 KD

Weighted Average, 2008: 1 Saudi Riyal= 0.1875 KD

Assume the functional currency for the subsidiary is the Saudi Riyal, compute the translated amount for inventory in the balance sheet for 2008?

Select one:

a. KD 7,330

b. KD 7,600

c. KD 12,775

d. None of the answers is correct

e. KD 13,125

Clear my choice