A foreign subsidiary of Dallas Jeans Corp.(a U.S.firm) has certain balance sheet accounts on December 31, 2019.The functional currency and currency of record is the peso and the parent's books are kept in U.S.dollars.Information relating to these accounts in U.S.dollars is as follows: ?

$$\begin{array} { l r r }
& { \text { Re-measured at } } \
& \text { Current Rate } & \text { Historical Rate } \
\text { Accounts Receivable } & \$ 175,000 & \$ 190,000 \
\text { Inventories }& 400,000 & 450,000 \
\text { Prepaid Insurance } & 40,000 & 45,000 \
\text { Land }& 30,000 & 100,000
\end{array}$$
What amount should be included as total assets on Dallas Jean's balance sheet on December 31, 2019 as the result of the above information?
A)$645,000
B)$765,000
C)$770,000
D)$785,000

Question

A foreign subsidiary of Dallas Jeans Corp.(a U.S.firm) has certain balance sheet accounts on December 31, 2019.The functional currency and currency of record is the peso and the parent's books are kept in U.S.dollars.Information relating to these accounts in U.S.dollars is as follows: ?

$$\begin{array} { l r r } 
&  { \text { Re-measured at } } \
& \text { Current Rate } & \text { Historical Rate } \
\text { Accounts Receivable }  & \$ 175,000 & \$ 190,000 \
\text { Inventories }& 400,000 & 450,000 \
 \text { Prepaid Insurance } & 40,000 & 45,000 \
\text { Land }& 30,000 & 100,000
\end{array}$$
 What amount should be included as total assets on Dallas Jean's balance sheet on December 31, 2019 as the result of the above information?
A)$645,000
B)$765,000
C)$770,000
D)$785,000

Quizplus · Accepted Answer

The correct answer is A. $645,000. This is the sum of the current rate amounts for accounts receivable, inventories, and prepaid insurance. Land is not remeasured at the current rate because it is a non-monetary asset.

A Foreign Subsidiary of Dallas Jeans Corp What Amount Should Be Included as Total Assets on Dallas