A U.S. company’s foreign subsidiary had these amounts in local currency units (LCU) in 2020: Cost of goods sold LCU 5,590,000 Beginning inventory 501,000 Ending inventory 604,000 The average exchange rate during 2020 was $1.50 = LCU 1. The beginning inventory was acquired when the exchange rate was $1.30 = LCU 1. Ending inventory was acquired when the exchange rate was $1.60 = LCU 1. The exchange rate at December 31, 2020, was $1.65 = LCU 1. Assuming that the foreign country is highly inflationary, at what amount should the foreign subsidiary’s cost of goods sold be reflected in the U.S. dollar income statement?
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A U.S. company’s foreign subsidiary had these amounts in local currency units (LCU) in 2020:
Cost of goods sold | LCU | 5,590,000 |
Beginning inventory | 501,000 | |
Ending inventory | 604,000 | |
The average exchange rate during 2020 was $1.50 = LCU 1. The beginning inventory was acquired when the exchange rate was $1.30 = LCU 1. Ending inventory was acquired when the exchange rate was $1.60 = LCU 1. The exchange rate at December 31, 2020, was $1.65 = LCU 1. Assuming that the foreign country is highly inflationary, at what amount should the foreign subsidiary’s cost of goods sold be reflected in the U.S. dollar income statement?
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- A U.S. company’s foreign subsidiary had these amounts in local currency units (LCU) in 2020: Cost of goods sold LCU 5,590,000 Beginning inventory 548,000 Ending inventory 609,000 The average exchange rate during 2020 was $1.30 = LCU 1. The beginning inventory was acquired when the exchange rate was $1.10 = LCU 1. Ending inventory was acquired when the exchange rate was $1.40 = LCU 1. The exchange rate at December 31, 2020, was $1.45 = LCU 1. Assuming that the foreign country is highly inflationary, at what amount should the foreign subsidiary’s cost of goods sold be reflected in the U.S. dollar income statement?A U.S. company's foreign subsidiary had these amounts in local currency units (LCU) in 2024: Cost of goods sold Beginning inventory Ending inventory LCU 5,230,000 536,000 622,000 The average exchange rate during 2024 was $1.30 = LCU 1. The beginning inventory was acquired when the exchange rate was $1.10 = LCU 1. Ending inventory was acquired when the exchange rate was $1.40 LCU 1. The exchange rate on December 31, 2024, was $1.45 = LCU 1. Required: Assuming that the foreign country is highly inflationary, determine the amount at which the foreign subsidiary's cost of goods sold should be reflected in the U.S. dollar income statement. Cost of goods soldA U.S. company's foreign subsidiary had these amounts in local currency units (LCU) in 2024: Cost of goods sold Beginning inventory Ending inventory LCU 5,710,000 542,000 623,000 The average exchange rate during 2024 was $1.20=LCU 1. The beginning inventory was acquired when the exchange rate was $1.00=LCU 1. Ending inventory was acquired when the exchange rate was $1.30 = LCU 1. The exchange rate on December 31, 2024, was $1.35=LCU 1. Required: Assuming that the foreign country is highly inflationary, determine the amount at which the foreign subsidiary's cost of goods sold should be reflected in the U.S. dollar income statement. Cost of goods sold
- A U.S. company's foreign subsidiary had the following amounts in stickles (5), the functional currency, in 2018: Cost of goods sold $12,000, e00 Ending inventory Beginning inventory 600,000 240,000 The average exchange rate during 2018 was 81 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The exchange rate at December 31, 2018 was §1= $.84. Assuming that the foreign nation for the subsidiary had a highly inflationary economy, at what amount should that foreign subsidiary's purchases have been reflected in the 2018 U.S. dollar income statement? Multiple Cholce $11,865,600. $11.577,600. $11.520.000. $11,613,600. $11,523,600.A U.S. company’s foreign subsidiary had these amounts in local currency units (LCU) in 2017: Cost of goods sold . . . . LCU 5,000,000Beginning inventory . . . . . 500,000Ending inventory . . . . . . . . 600,000 The average exchange rate during 2017 was $1.00 = LCU 1. The beginning inventory was acquired when the exchange rate was $0.80 = LCU 1. Ending inventory was acquired when the exchange rate was $1.10 = LCU 1. The exchange rate at December 31, 2017, was $1.15 = LCU 1. Assuming that the foreign country is highly inflationary, at what amount should the foreign subsidiary’s cost of goods sold be reflected in the U.S. dollar income statement? Choose the correct.a. $4,440,000.b. $4,840,000.c. $5,000,000.d. $5,750,000.1 . PL Co purchased goods on credit from a US supplier costing $US 225,000 on 5th June 2020 when the exchange rate was A$1 = US0.69 . On 30 June 2020, balance date , the exchange rate was A$1 = US0.72 . PL Co paid the US supplier on 7th July 2020 when the exchange rate was A$1 = 0.74. Required : Prepare the journal entries for the above
- On July 1, 2020, a Filipino entity whose functional currency is Philippine Peso purchased on account inventories at a cost of $100 to be paid on June 30, 2021. On October 1, 2020, the said inventories were soid on account by the Filipino entity at a selling price of $150 to be collected on September 30, 2021. The following direct foreign exchange rates are given: July 1,2020 October 1, 2020 December 31, 2020 Buying Spot P40 P42 P45 Selling Spot P50 P48 P52 56. What is the gross profit to be reported by the Filipino entity for the year ended December 31, 2020? a. 1,300 b. 2,100 c. 2,400 d. 3,200 57. what is the net foreign currency gain or loss for the year ended December 31, 2020? a. 150 net gain b. 250 net gain c. (350) net loss d. (50) net lossClark Company, a U.S. corporation, sold inventory on December 1, 2022, with payment of 12,000 British pounds to be received in sixty days. The pertinent exchange rates were as follows: Date December 1 December 31 January 30 Spot Rate $ 1.831 $1.976 $1.768 What amount of foreign exchange gain or loss should be recorded on January 30? $2,496 loss $2,496 gain $1,740 loss $1,740 gain 7:11 PM6. A U.S. company executed a series of transactions in a foreign country during 2021. The appropriate exchange rates during 2021 were as follows: Date June 1, 2021 August 1, 2021 December 31, 2021 Exchange Rate $.77 = §1 $.80 = §1 $.83 = §1 The following transactions occurred during 2021: June 1 Bought inventory of $50,000 on credit. Sold all inventory for $65,000 on credit. Aug. 1 Required: Prepare all journal entries in U.S. dollars along with any December 31, 2021 adjusting entries. Show your work
- On 11/1/2020, an American firm purchased an inventory costing 100,000 Canadian Dollars from a Canadian firm to be paid for on 2/1/2020. Also on 11/1/2020, the American firm entered into a forward contract to purchase 100,000 Canadian dollars for delivery on 2/1/2020. The exchange rates were as follows: Spot Forward 11/1/2020 1 CD = $0.73 1 CD = $0.74 12/31/2020 1 CD = $0.75 1 CD = $0.76 2/1/2021 1 CD = $0.79 1 CD = $0.79 The American firm's fiscal year-end is 12/31. The changes in the value of the forward contract should be discounted at 12%. 1. What is the beginning balance (as of 1/1/2021) of accounts payable to the Canadian firm? a. 79,000 b. 75,000 c. 0 d. 73,000 2. What is the balance on the settlement date (2/1/2021) of inventory purchased from the Canadian firm? a. 73,000 b. 75,000 c. 0 d. 79,000 3. How much…On December 20, 2023, Momeier Company (a U.S.-based company) sold parts to a foreign customer at a price of 165,000 rials. Payment is received on January 10, 2024. Currency exchange rates are as follows: DateU.S. Dollar per RialDecember 20, 2023$ 1.26December 31, 20231.23January 10, 20241.19 Required: How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2023 income statement? How does the fluctuation in the U.S. dollar per rial exchange rate affect Momeier's 2024 income statement? a. The rial receivable exchange b. The rial receivable exchange S in U.S. dollar value, resulting in a foreign of in 2023. in U.S. dollar value, resulting in a foreign of in 2024.Bento Corporation (a U.S.-based company) acquired merchandise on account from a foreign supplier on November 1, 2023. for 100,000 crowns. It paid the foreign currency account payable on January 15, 2024. The following exchange rates are relevant: Date November 1, 2023 December 31, 2023 January 15, 2024 a. The Required: a. How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento's 2023 income statement? b. How does the fluctuation in the U.S. dollar per crown exchange rate affect Bento's 2024 income statement? b. The U.S. Dollar per Crown foreign exchange $ 0.754 0.742 0.747 in the dollar value of the crown payable is recorded as in 2023. foreign exchange in the dollar value of the crown payable is recorded as in 2024.