17) 17) A foreign subsidiary's functional currency is its local currency, which has not experienced significant inflation. The weighted average exchange rate for the current year would be the appropriate exchange rate for translating Salaries Expense Sales to External Customers A Yes NO Yes No NO Yes No 18) A company from the United Kingdom uses British pounds in its normal operations, 18) reports in the European Union in euros, and reports in the United States in U.S. dollars. The company is owned by a private equity firm in Japan. What is the company's functional currency? A The U.S. dollar. B. The Japanese yen. C. The British pound. D. The euro. 19) Certain balance sheet accounts of a foreign subsidiary of Rowan, Inc., at December 19) 31 have been translated into U.S. dollars as follows: Translated At Current Rates Historical Rates Notes receivable, long-term $240.000 $200,000 Prepaid rent 85,000 80,000 Patent 150,000 170,000 Totals $475,000 $450,000 The subsidiary's functional currency is the currency of the country in which it is located. What total amount should be included in Rowan's December 31 consolidated balance sheet for the above accounts? A $495,000 B. $455,000 C. $450,000 D. $475,000 20) in which of the following cases should the functional currency of the foreign 20) subsidiary be the reporting currency of the U.S.parent (U.S. dollars)? A. The subsidiary makes the majority of the transactions in its home country's currency B. The U.S. dollar is experiencing high inflation C. The subsidiary's home currency is experiencing high inflation D. The subsidiary is in bankruptcy proceedings