A Belgium subsidiary's beginning and ending trial balances appear below: Dr (Cr) January 1 December 31 Cash,
Question:
A Belgium subsidiary's beginning and ending trial balances appear below:
| Dr (Cr) |
| January 1 | December 31 |
Cash, receivables | € 1,500 | € 1,200 |
Inventories | 3,000 | 3,500 |
Plant & equipment, net | 30,000 | 39,000 |
Liabilities | (18,500) | (27,200) |
Capital stock | (4,000) | (4,000) |
Retained earnings, beginning | (12,000) | (12,000) |
Sales revenue | -- | (15,000) |
Cost of sales | | 9,500 |
Out-of-pocket selling & administrative expenses | -- | 4,000 |
Depreciation expense | -- | 1,000 |
Total | € 0 | € 0 |
Exchange rates ($/€) are:
Beginning of year | $1.25 |
Average for year | 1.22 |
End of year | 1.20 |
The subsidiary was acquired at the beginning of the year. Its sales, inventory purchases, and out-of-pocket selling and administrative expenses occurred evenly during the year. Equipment was purchased for €10,000 when the exchange rate was $1.23. Depreciation for the year includes €200 related to the equipment purchased during the year. The ending inventory was purchased at the end of the year, and the beginning inventory was purchased at the end of the previous year.
If the subsidiary's functional currency is the U.S. dollar, what is remeasured depreciation expense for the year?
A. $1,220
B. $1,246
C. $1,250
D. $1,200
Intermediate Accounting
ISBN: 978-0324300987
10th Edition
Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones