A Clarke Corporation subsidiary buys marketable equity securities and inventory on April 1,2013,: for 100,000 pesos each.

Question:

A Clarke subsidiary buys marketable equity securities and inventory on April 1,2013,: for 100,000 pesos each. It pays for both items on June 1, 2013, and they are still on hand at yearend. Inventory is carried at cost under the lower-of-cost-or-market rule. Currency exchange rates for 1 peso follow:

A Clarke Corporation subsidiary buys marketable equity securities and inventory

Assume that the peso is the subsidiary's functional currency. What balances does a consolidated balance sheet report as of December 31, 2013?
a. Marketable equity securities = $16,000 and Inventory = $16,000.
b. Marketable equity securities = $17,000 and Inventory = $17,000.
c. Marketable equity securities = $19,000 and Inventory = $16,000.
d. Marketable equity securities = $19,000 and Inventory = $19,000.

Balance Sheet
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