International Accounting Foreing Currency Translation
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A 100 percent owned foreign subsidiary's trial balance consist of the account listed as follows. Which exchange rate - current, historical, or average would be used to translate these accounts to parent currency assuming that the foreign currency is the functional currency? Which rates would be used if the parent currency were the functional currency?
Trial Balance Accounts:
Cash
Marketable Securities (cost)
Accounts receivable
Inventory
Equipment
Accumulated depreciation
Prepaid Expenses
Due to parent (denominated in dollars)
Bonds payable
Deferred Income taxes
Common Stock
Premuim on common stock
Retained earnings
Sales
Purchases
Cost of sales
General and administrative expenses
Selling expenses
Depreciation
Amortization of goodwill
Income tax expense
Intercompany interest expense
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Solution Summary
This solution helps with an international accounting problem about foreign currency translations.
Solution Preview
Functional Currency Foreign currency Parent currency
Trial Balance Accounts
Cash Current Current
Marketable Securities (cost) Current Current
Accounts ...
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