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Question 2 2 A Belgium subsidiary's beginning and ending trial balances appear below: D r ( C r ) January 1 December 3 1 Cash,

Question 22
A Belgium subsidiary's beginning and ending trial balances appear below: Dr(Cr) January 1 December 31 Cash, receivables 1,5001,200 Inventories 3,0003,500 Plant & equipment, net 30,00039,000 Liabilities (18,500)(27,200) Capital stock (4,000)(4,000) Retained earnings, beginning (12,000)(12,000) Sales revenue --(15,000) Cost of sales 9,500 Out-of-pocket selling & administrative expenses --4,000 Depreciation expense --1,000 Total 00 Exchange rates ($) are: Beginning of year $1.25 Average for year 1.22 End of year 1.20 The subsidiary was acquired at the beginning of the year. Its sales, inventory purchases, and out-of-pocket selling and administrative expenses occurred evenly during the year. Equipment was purchased for 10,000 when the exchange rate was $1.23. Depreciation for the year includes 200 related to the equipment purchased during the year. The ending inventory was purchased at the end of the year, and the beginning inventory was purchased at the end of the previous year. If the subsidiary's functional currency is the euro, what is its exposure to translation gains and losses as of the beginning of the year? Select one: A.16,000 B.(17,000) C.1,500 D.(18,500)
Question 23
A Belgium subsidiary's beginning and ending trial balances appear below: Dr(Cr) January 1 December 31 Cash, receivables 1,5001,200 Inventories 3,0003,500 Plant & equipment, net 30,00039,000 Liabilities (18,500)(27,200) Capital stock (4,000)(4,000) Retained earnings, beginning (12,000)(12,000) Sales revenue --(15,000) Cost of sales 9,500 Out-of-pocket selling & administrative expenses --4,000 Depreciation expense --1,000 Total 00 Exchange rates ($) are: Beginning of year $1.25 Average for year 1.22 End of year 1.20 The subsidiary was acquired at the beginning of the year. Its sales, inventory purchases, and out-of-pocket selling and administrative expenses occurred evenly during the year. Equipment was purchased for 10,000 when the exchange rate was $1.23. Depreciation for the year includes 200 related to the equipment purchased during the year. The ending inventory was purchased at the end of the year, and the beginning inventory was purchased at the end of the previous year. If the subsidiary's functional currency is the U.S. dollar, what is its exposure to remeasurement gains and losses at the end of the year? Select one: A.16,000B,(27,200) C.16,500 D.(26,000)
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