A U.S.company's foreign subsidiary had the following amounts in stickles (§), the functional currency, in 2018: The average exchange rate during 2018 was §1 = $.96.The beginning inventory was acquired when the exchange rate was §1 = $1.20.The ending inventory was acquired when the exchange rate was §1 = $.90.The exchange rate at December 31, 2018 was §1 = $.84.Assuming that the foreign nation for the subsidiary had a highly inflationary economy, at what amount should that foreign subsidiary's purchases have been reflected in the 2018 U.S.dollar income statement?
A) $11,865,600.
B) $11,577,600.
C) $11,520,000.
D) $11,613,600.
E) $11,523,600.

Question

A U.S.company's foreign subsidiary had the following amounts in stickles (§), the functional currency, in 2018:  The average exchange rate during 2018 was §1 = $.96.The beginning inventory was acquired when the exchange rate was §1 = $1.20.The ending inventory was acquired when the exchange rate was §1 = $.90.The exchange rate at December 31, 2018 was §1 = $.84.Assuming that the foreign nation for the subsidiary had a highly inflationary economy, at what amount should that foreign subsidiary's purchases have been reflected in the 2018 U.S.dollar income statement?
A) $11,865,600. 
B) $11,577,600. 
C) $11,520,000. 
D) $11,613,600. 
E) $11,523,600.

Quizplus · Accepted Answer

The Answer of A U.S.company's foreign subsidiary had the following amounts in stickles (§), the functional currency, in 2018:  The average exchange rate during 2018 was §1 = $.96.The beginning inventory was acquired when the exchange rate was §1 = $1.20.The ending inventory was acquired when the exchange rate was §1 = $.90.The exchange rate at December 31, 2018 was §1 = $.84.Assuming that the foreign nation for the subsidiary had a highly inflationary economy, at what amount should that foreign subsidiary's purchases have been reflected in the 2018 U.S.dollar income statement?
A) $11,865,600. 
B) $11,577,600. 
C) $11,520,000. 
D) $11,613,600. 
E) $11,523,600.

A USCompany's Foreign Subsidiary Had the Following Amounts in Stickles (§)