Lancer, Inc. (a U.S.-based company), establishes a subsidiary in Croatia on January 1, 2019. The following account balances for the year ending December 31, 2020, are stated in kuna (K), the local currency: SalesK200,000Inventory (bought on 3/1/20) 100,000Equipment (bought on 1/1/19) 80,000Rent expense 10,000Dividends (declared on 10/1/20) 20,000Notes receivable (to be collected in 2023) 30,000Accumulated depreciation—equipment 24,000Salary payable 5,000Depreciation expense 8,000 The following U.S. $ per kuna exchange rates are applicable: January 1, 2019$0.13Average for 20190.14January 1, 20200.18March 1, 20200.19October 1, 20200.21December 31, 20200.22Average for 20200.20 Lancer is preparing account balances to produce consolidated financial statements. Assuming that the kuna is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements?Assuming that the U.S. dollar is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements? (For all requirements, round your answers to 2 decimal places.) ### Financial Accounts Exchange Rate TableThis table is part of a financial educational resource, listing various financial accounts with a designated space to record exchange rates. Understanding these accounts is crucial for managing finances and keeping precise records. Here is the transcription of the table:#### Table Columns1. **Account**2. **Exchange Rate**#### Accounts Listed- Sales- Inventory- Equipment- Rent Expense- Dividends- Notes Receivable- Accumulated Depreciation — Equipment- Salary Payable- Depreciation ExpenseThe table provides a structured layout to input or reference the exchange rates applicable to each account, which is essential for financial reporting and analysis, especially when dealing with international transactions.

The exchange rate is the rate at which the two countries' currencies are exchanged. When changing…

Answered: ncer, Inc. (a U.S.-based company),…

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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Lancer, Inc. (a U.S.-based company), establishes a subsidiary in Croatia on January 1, 2019. The following account balances for the year ending December 31, 2020, are stated in kuna (K), the local currency:


Sales	K	200,000
Inventory (bought on 3/1/20)		100,000
Equipment (bought on 1/1/19)		80,000
Rent expense		10,000
Dividends (declared on 10/1/20)		20,000
Notes receivable (to be collected in 2023)		30,000
Accumulated depreciation—equipment		24,000
Salary payable		5,000
Depreciation expense		8,000

The following U.S. $ per kuna exchange rates are applicable:


January 1, 2019	$0.13
Average for 2019	0.14
January 1, 2020	0.18
March 1, 2020	0.19
October 1, 2020	0.21
December 31, 2020	0.22
Average for 2020	0.20

Lancer is preparing account balances to produce consolidated financial statements.

Assuming that the kuna is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements?
Assuming that the U.S. dollar is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements?

(For all requirements, round your answers to 2 decimal places.)

### Financial Accounts Exchange Rate Table

This table is part of a financial educational resource, listing various financial accounts with a designated space to record exchange rates. Understanding these accounts is crucial for managing finances and keeping precise records. Here is the transcription of the table:

#### Table Columns
1. **Account**
2. **Exchange Rate**

#### Accounts Listed
- Sales
- Inventory
- Equipment
- Rent Expense
- Dividends
- Notes Receivable
- Accumulated Depreciation — Equipment
- Salary Payable
- Depreciation Expense

The table provides a structured layout to input or reference the exchange rates applicable to each account, which is essential for financial reporting and analysis, especially when dealing with international transactions.

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