A wholly owned subsidiary of a U.S. parent company haS certain expense accounts for the year endedDecember 31, 2011, stated in local currency units (LCU) as follows:LCUDepreciation of equipment (related assetswere purchased January 1, 2009)375,000Provision for doubtful accounts250,000Rent625,000The exchange rates at various dates are as follows:Dollar equivalentof 1 LCUDecember 31, 2011$0.500,55Average for year ended December 31, 20110.40January 1, 200910:59T-TI/-WENlenovoDODOLBYO Average for year ended December 31, 20110.55January 1, 20090.40Assume that the LCU is the subsidiary's functional currency and that the charges to the expense accountsoccurred approximately evenly during the year. What total dollar amount should be included in thetranslated income statement to reflect these expenses?a. $550,000b.$687,500Uc.$500,000Od.$625,000The translation adjustment that results from transtating the financial statements of a foreign subsidiaryusing the current rate method should be:11:01ENalllenovo

If the financial statements of foreign subsidiary are translated into functional currency using the…

A wholly owned subsidiary of a U.S. parent company has certain expense accounts for the year ended December 31, 2011, stated in local currency units (LCU) as follows: LCU Depreciation of equipment (related assets were purchased January 1, 2009) 375,000 Provision for doubtful accounts 250,000 Rent 625,000 The exchange rates at various dates are as follows: Dollar equivalent of I LCU $0.50 December 31, 2011 0,55 Average for year ended December 31, 2011 0,40 January 1. 2009 - ill e 10:59 7-TI/-W EN

A wholly owned subsidiary of a U.S. parent company has certain expense accounts for the year ended December 31, 2011, stated in local currency units (LCU) as follows: LCU Depreciation of equipment (related assets were purchased January 1, 2009) 375,000 Provision for doubtful accounts 250,000 Rent 625,000 The exchange rates at various dates are as follows: Dollar equivalent of I LCU $0.50 December 31, 2011 0,55 Average for year ended December 31, 2011 0,40 January 1. 2009 - ill e 10:59 7-TI/-W EN

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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