Accounts are listed below for a foreign subsidiary that maintains its books in its local currency. The equity interest in the subsidiary was acquired in a purchase transaction. In the space provided, indicate the exchange rate that would be used to translate the accounts into dollars assuming that the functional currency was identified (a) as the U.S. dollar and (b) as the foreign entity’s local currency. Exchange Rate if theFunctional Currency Is:Account U.S. Dollar Local CurrencyCash Accounts receivable Inventory carried at cost Inventory carried at market Prepaid rent Property, plant, and equipment Goodwill Accounts payable Bonds payable Unamortized premium on bonds payable Preferred stock carried at issuance price Common stock Sales Cost of goods sold Depreciation expense

If the functionalCurrency Is Accounts USD Local Currency Cash C C Accounts receivable C…

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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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Accounts are listed below for a foreign subsidiary that maintains its books in its local currency. The equity interest in the subsidiary was acquired in a purchase transaction. In the space provided, indicate the exchange rate that would be used to translate the accounts into dollars assuming that the functional currency was identified (a) as the U.S. dollar and (b) as the foreign entity’s local currency.

	Exchange Rate if the Functional Currency Is:
*Account*	U.S. Dollar	Local Currency
Cash
Accounts receivable
Inventory carried at cost
Inventory carried at market
Prepaid rent
Property, plant, and equipment
Goodwill
Accounts payable
Bonds payable
Unamortized premium on bonds payable
Preferred stock carried at issuance price
Common stock
Sales
Cost of goods sold
Depreciation expense

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