A U S company 's foreign subsidiary had these amounts in local currency units (LCU) in 2017 Cost of goods sold LCU 5,000,000 Beginning inventory 500,000 Ending 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 ...

B Highly inflationary economy temporal method co ...

A U.S. company's foreign subsidiary had these amounts in local currency units (LCU) in 2017: Cost of

Question:

A U.S. company's foreign subsidiary had these amounts in local currency units (LCU) in 2017:
Cost of goods sold . . . . . . . . . . . . . . . . . . . . LCU 5,000,000
Beginning inventory . . . . . . . . . . . . . . . . . .......... . 500,000
. . . . . . . . . . . . . . . . . . . . .......... . 600,000
The average during 2017 was $1.00 = LCU 1. The beginning inventory was acquired when the was $0.80 = LCU 1. was acquired when the was $1.10 = LCU 1. The 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?
a. $4,440,000.
b. $4,840,000.
c. $5,000,000.
d. $5,750,000.
Ending Inventory
The ending inventory is the amount of inventory that a business is required to present on its balance sheet. It can be calculated using the ending inventory formula Ending Inventory Formula =... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...