EXERCISE $13-1$

Identifying the Exchange Rate LO $5$

Accounts are listed below for a foreign subsidiary that maintains its books in its local currency. The equity interest in the subsidiary was acquired in a purchase transaction. In

the space provided, indicate the exchange rate that would be used to translate the accounts into dollars assuming that the functional currency was identified $($a$)$ as the U$.$S$.$ dollar

and $($b$)$ as the foreign entity's local currency. Use the following letters to identify the exchange rate:

H$-$historical exchange rate

C$-$current exchange rate

A$-$average exchange rate for the current period