A U.S. parent acquired all of the stock of an Italian subsidiary on January 1, 2023, for € 1,050,000. The excess paid over book value was attributed to goodwill, which was impaired by € 35,000 during 2023. The subsidiary's January 1 and December 31, 2023, trial balances are as follows, in euros: Cash, receivables Inventories, at FIFO cost Plant & equipment, net Liabilities Capital stock Retained earnings, beginning Dividends Sales revenue Cost of goods sold Depreciation expense Out-of-pocket expenses December 31, 2023 Dr (Cr) January 1, 2023 Dr (Cr) € 126,000 € 140,000 350,000 280,000 910,000 1,120,000 (980,000) (140,000) (420,000) January 1, 2023 Average for 2023 Rate when dividends declared Rate when ending inventory purchased December 31, 2023 (756,000) (140,000) (420,000) 70,000 Sales, purchases, and recurring out-of-pocket expenses occurred evenly throughout the year. The subsidiary's beginning inventory for 2023 was purchased at the end of 2022. The subsidiary did not purchase any plant & equipment during 2023. Exchange rates ($/€) are: $/€ $1.12 1.17 1.19 1.21 1.22 (2,800,000) 1,610,000 210,000 840,000 €0 €0 If the subsidiary's functional currency is the euro, what is the balance for 2023 depreciation expense, in U.S. dollars? Select one: O a. $235,200 O b. $210,000 O c. $245,700 O d. $256,200
A U.S. parent acquired all of the stock of an Italian subsidiary on January 1, 2023, for € 1,050,000. The excess paid over book value was attributed to goodwill, which was impaired by € 35,000 during 2023. The subsidiary's January 1 and December 31, 2023, trial balances are as follows, in euros: Cash, receivables Inventories, at FIFO cost Plant & equipment, net Liabilities Capital stock Retained earnings, beginning Dividends Sales revenue Cost of goods sold Depreciation expense Out-of-pocket expenses December 31, 2023 Dr (Cr) January 1, 2023 Dr (Cr) € 126,000 € 140,000 350,000 280,000 910,000 1,120,000 (980,000) (140,000) (420,000) January 1, 2023 Average for 2023 Rate when dividends declared Rate when ending inventory purchased December 31, 2023 (756,000) (140,000) (420,000) 70,000 Sales, purchases, and recurring out-of-pocket expenses occurred evenly throughout the year. The subsidiary's beginning inventory for 2023 was purchased at the end of 2022. The subsidiary did not purchase any plant & equipment during 2023. Exchange rates ($/€) are: $/€ $1.12 1.17 1.19 1.21 1.22 (2,800,000) 1,610,000 210,000 840,000 €0 €0 If the subsidiary's functional currency is the euro, what is the balance for 2023 depreciation expense, in U.S. dollars? Select one: O a. $235,200 O b. $210,000 O c. $245,700 O d. $256,200
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
![A U.S. parent acquired all of the stock of an Italian subsidiary on January 1, 2023, for € 1,050,000. The excess paid over book
value was attributed to goodwill, which was impaired by € 35,000 during 2023. The subsidiary's January 1 and December 31,
2023, trial balances are as follows, in euros:
Cash, receivables
Inventories, at FIFO cost
Plant & equipment, net
Liabilities
Capital stock
Retained earnings, beginning
Dividends
Sales revenue
Cost of goods sold
Depreciation expense
Out-of-pocket expenses
December 31, 2023 Dr (Cr) January 1, 2023 Dr (Cr)
€ 126.000
€ 140,000
350,000
280,000
910,000
1,120,000
(756,000)
(980,000)
(140,000)
(140,000)
(420,000)
(420,000)
70,000
January 1, 2023
Average for 2023
Rate when dividends declared
Rate when ending inventory purchased
December 31, 2023
Select one:
O a. $235,200
O
b. $210,000
O
c. $245,700
d. $256,200
(2,800,000)
1,610,000
Sales, purchases, and recurring out-of-pocket expenses occurred evenly throughout the year. The subsidiary's beginning
inventory for 2023 was purchased at the end of 2022. The subsidiary did not purchase any plant & equipment during 2023.
Exchange rates ($/€) are:
$/€
$1.12
1.17
1.19
1.21
1.22
210,000
840,000
€0
€0
If the subsidiary's functional currency is the euro, what is the balance for 2023 depreciation expense, in U.S. dollars?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7ab2fcdd-e673-450e-8879-48d7de8ef6bd%2F7340f690-9995-4d7f-bd61-f1ef9de78b49%2Fwe91h1p_processed.jpeg&w=3840&q=75)
Transcribed Image Text:A U.S. parent acquired all of the stock of an Italian subsidiary on January 1, 2023, for € 1,050,000. The excess paid over book
value was attributed to goodwill, which was impaired by € 35,000 during 2023. The subsidiary's January 1 and December 31,
2023, trial balances are as follows, in euros:
Cash, receivables
Inventories, at FIFO cost
Plant & equipment, net
Liabilities
Capital stock
Retained earnings, beginning
Dividends
Sales revenue
Cost of goods sold
Depreciation expense
Out-of-pocket expenses
December 31, 2023 Dr (Cr) January 1, 2023 Dr (Cr)
€ 126.000
€ 140,000
350,000
280,000
910,000
1,120,000
(756,000)
(980,000)
(140,000)
(140,000)
(420,000)
(420,000)
70,000
January 1, 2023
Average for 2023
Rate when dividends declared
Rate when ending inventory purchased
December 31, 2023
Select one:
O a. $235,200
O
b. $210,000
O
c. $245,700
d. $256,200
(2,800,000)
1,610,000
Sales, purchases, and recurring out-of-pocket expenses occurred evenly throughout the year. The subsidiary's beginning
inventory for 2023 was purchased at the end of 2022. The subsidiary did not purchase any plant & equipment during 2023.
Exchange rates ($/€) are:
$/€
$1.12
1.17
1.19
1.21
1.22
210,000
840,000
€0
€0
If the subsidiary's functional currency is the euro, what is the balance for 2023 depreciation expense, in U.S. dollars?
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