What amount does Newberry's consolidated income statement report for cost of goods sold for the year ending December 31, 2018?
a. $16,000.
b. $17,000.
c. $18,000.
d. $19,000.
Newberry, Inc., whose reporting currency is the U.S. dollar ($), has a subsidiary in Argentina, whose functional currency also is the $. The subsidiary acquires inventory on credit on November 1, 2017, for 100,000 pesos that is sold on January 17, 2018, for 130,000 pesos. The subsidiary pays for the inventory on January 31, 2018. Currency exchange rates are as follows:
November 1, 2017 . . . . . . . . . . . . . . . . . . . . . . $0.16 = 1 peso
December 31, 2017 . . . . . . . . . . . . . . . . . . . ... . 0.17 = 1
January 17, 2018 . . . . . . . . . . . . . . . . . . . . . . ....0.18 = 1
January 31, 2018 . . . . . . . . . . . . . . . . . . . . . . . ... 0.19 = 1