On September 30,2008,Wilfred Company sold inventory to Jackson Corporation,its Canadian subsidiary.The goods cost Wilfred $30,000 and were sold to Jackson for $40,000,payable in Canadian dollars.The goods are still on hand at the end of the year on December 31.The Canadian dollar (C$)is the functional currency of the Canadian subsidiary.The exchange rates follow:

-Based on the preceding information,at what dollar amount is the ending inventory shown in the trial balance of the consolidated workpaper?
A)$45,000
B)$50,000
C)$40,000
D)$35,000

Question

On September 30,2008,Wilfred Company sold inventory to Jackson Corporation,its Canadian subsidiary.The goods cost Wilfred $30,000 and were sold to Jackson for $40,000,payable in Canadian dollars.The goods are still on hand at the end of the year on December 31.The Canadian dollar (C$)is the functional currency of the Canadian subsidiary.The exchange rates follow:
 
-Based on the preceding information,at what dollar amount is the ending inventory shown in the trial balance of the consolidated workpaper?
A)$45,000 
B)$50,000 
C)$40,000 
D)$35,000

Quizplus · Accepted Answer

The ending inventory is shown in the trial balance of the consolidated workpaper at $45,000. This is because the ending inventory of the parent company is $40,000 and the ending inventory of the subsidiary company is $5,000. When these two amounts are combined, the total ending inventory is $45,000.

On September 30,2008,Wilfred Company Sold Inventory to Jackson Corporation,its Canadian