Rhante is a German company wholly owned by a U.S. firm. Its inventory is valued at the lower of cost or market, with cost being measured by the average cost method. Purchases of inventory occur evenly throughout the period.
In 2005 Rhante’s ending inventory was 50,000 euros at cost and 48,000 euros at market. Assume the following exchange rates: Jan. 1, 2005 1 euro = $1.40 U.S. Dec. 31, 2005 1 euro = $1.53 U.S. 2005 average 1 euro = $1.45 U.S. Determine the re-measurere-measured value of Rhante’s inventory to be included in the consolidated balance sheet for the U.S. parent given Rhante’s functional currency is the U.S. dollar.

a. $72,500
b. $73,440
c. $69,600
d. $76,500

Answer rating: 100% (QA)

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