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    Translating the Financial Statements into U.S. Dollars

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    1. Below you will find the balance sheet and income statement of a U.S. Corp's foreign subsidiary at the end of its first year of operations (see attachment). The following exchange rates were in effect during the period.
    Jan. 1, 2005 - $1 = 1FC
    Dec. 31, 2005 - $1.70 = 1FC.

    The average exchange rate during the period was $1.40 = 1FC. The common stock was issued on Jan. 1, 2005.

    Assuming that foreign currency is the functional currency translate the financial statements into U.S. dollars.

    See attached for calculations.

    © BrainMass Inc. brainmass.com October 10, 2019, 2:03 am ad1c9bdddf
    https://brainmass.com/business/foreign-exchange-rates/translating-financial-statements-usa-dollars-361079

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    Since the foreign currency is the functional currency, the current rate method should ...

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    The solution translates the financial statements into U.S. dollars assuming that foreign currency is the functional currency.

    $2.19