Mohammed Ltd is a subsidiary of Sualihu Corporation and is located in Madrid, Spain, where the currency is euro (€). The data on Mohammed’s inventory and purchases are as follows:

Inventory, January 1 20X7	€220,000
Purchases during 20X7	846,000
Inventory, December 31 20X7	180,000

The beginning inventory was acquired during the fourth quarter of 20X6, and ending inventory was acquired during the fourth quarter of 20X7. Purchases were made evenly over the year. Exchange rates were as:

Fourth quarter of 20X6	€1=$1.29015
January 1, 20X7	€1=$1.32030
Average during 20X7	€1=$1.39655
Fourth quarter of 20X7	€1=$1.45000
December 31 20X7	€1=$1.47280

1- What is the translation value of cost of goods sold (COGS) for 20X7, assuming the euro is the functional currency?

2- What is the remeasurement value of the cost of goods sold (COGS) for 20X7, assuming the U.S. dollar is the functional currency?

Answer rating: 100% (QA)

goods sold COGS for 20X7 assuming the US dollar is the reporting currency To answer these questions we need to calculate the translation value and rem... View the full answer