A U.S. company owns an 80% interest in a company located on Mars. Martian currency is called the Martian Credit. During the year the parent company sold inventory that had cost $24,500 to the subsidiary on account for $28,500 when the exchange rate was $0.5192. The subsidiary still held one-half of the inventory and had not paid the parent company for the purchase at the end of the fiscal period. The unsettled account is denominated in dollars. The exchange rate at the fiscal year-end was $0.4994. (c1) Assuming that the transaction had been denominated in 46,051 Martian Credits rather than dollars, compute the transaction gain or loss that would be reported by the parent company. (Round answers to 0 decimal places, e.g. 5,125.)

A U.S. company owns an 80% interest in a company located on Mars. Martian currency is called the Martian Credit. During the year the parent company sold inventory that had cost $24,500 to the subsidiary on account for $28,500 when the exchange rate was $0.5192. The subsidiary still held one-half of the inventory and had not paid the parent company for the purchase at the end of the fiscal period. The unsettled account is denominated in dollars. The exchange rate at the fiscal year-end was $0.4994. (c1) Assuming that the transaction had been denominated in 46,051 Martian Credits rather than dollars, compute the transaction gain or loss that would be reported by the parent company. (Round answers to 0 decimal places, e.g. 5,125.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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