AU.S. company owns an 80% interest in a company located on Mars. Martian currency the parent company sold inventory that had cost $24,900 to the subsidiary on account: $0.5192. The subsidiary still held one-half of the inventory and had not paid the parent fiscal period. The unsettled account is denominated in dollars. The exchange rate at the
AU.S. company owns an 80% interest in a company located on Mars. Martian currency the parent company sold inventory that had cost $24,900 to the subsidiary on account: $0.5192. The subsidiary still held one-half of the inventory and had not paid the parent fiscal period. The unsettled account is denominated in dollars. The exchange rate at the
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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VITY FURUS
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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 $24,900 to the subsidiary on account for $29,100 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 50,209 Martian Credits rather than dollars, compute the transaction gain
or loss that would be reported by the parent company. (Round answers to O decimal places, e.g. 5,125.)
Transaction
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