Exercise 6 (LO 6) Remeasuring selected balances with various functional currencies. For each of the following independent cases, determine the translated value of the relevant accounts.

Case A: A foreign subsidiary has inventory accounted for by the lower-of-cost-or-market rule.

The 20X7 ending inventory, with a cost of 180,000 FC, was written down to a fair value of 176,000 FC. The cost of the inventory is traceable to an October 1, 20X7 purchase of 150,000 FC and a December 15, 20X7 purchase of 30,000 FC. The foreign company’s functional currency is the U.S. dollar. Relevant exchange rates on October 1, 20X7, December 15, 20X7, and December 31, 20X7, are 1 FC
$1.76, 1 FC
$1.72, and 1 FC
$1.82, respectively. Calculate the translated value of the December 31, 20X7 ending inventory.

Case B: A foreign subsidiary purchased inventory for 380,000 FC from its U.S. parent on November 1, 20X7. The parent’s cost of the inventory sold was $500,000. As of December 31, 20X7, the subsidiary has 60% of the inventory on hand. The subsidiary’s functional currency is the foreign currency. Relevant exchange rates on November 1, 20X7, and December 31, 20X7, are 1 FC
$2.00 and 1 FC
$2.10, respectively. Calculate the translated value of the subsidiary’s December 31, 20X7 inventory after eliminating the intercompany profit.