Question

A wholly owned subsidiary of Ward Inc. has certain expense accounts for the year ended December 31, 2014, stated in local currency units (LCU) as follows:
LCU
Depreciation of equipment (related assets
were purchased January 1, 2012) .... 120,000
Provision for doubtful accounts ...... 80,000
Rent ............... 200,000
The exchange rates at various dates are as follows:
Dollar Equivalent of LCU
12/31/14 ............ $0.40
Average for year ended 12/31/14 . 0.44
1/1/12 ............ 0.50
Assume that the LCU is the subsidiary’s functional currency and that the charges to the expense accounts occurred approximately evenly during the year.

Required:
What total dollar amount should be included in Ward’s 2014 consolidated income statement to reflect these expenses?



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  • CreatedSeptember 10, 2014
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