Translate into dollars the balance sheet of Colorado Leather Goods’ Spanish subsidiary. When Colorado Leather Goods acquired the foreign subsidiary, a euro was worth $1.02. The current exchange rate is $1.34. During the period when retained earnings were earned, the average exchange rate was $1.17 per euro.
Euros
Assets...................................... 400,000
Liabilities................................ 300,000
Stockholders’ equity:
Common stock.................... 45,000
Retained earnings................ 55,000
400,000
During the period covered by this situation, which currency was stronger, the dollar or the euro?