REFERENCE: Ref.10_01
Westmore,Ltd.is a British subsidiary of a U.S.company.Westmore's functional currency is the pound sterling.The following exchange rates were in effect during 2008:
-On December 31,Westmore had accounts receivable of £280,000.What amount (rounded)would have been included for this subsidiary in calculating consolidated accounts receivable?

Question

REFERENCE: Ref.10_01
Westmore,Ltd.is a British subsidiary of a U.S.company.Westmore's functional currency is the pound sterling.The following exchange rates were in effect during 2008: 
-On December 31,Westmore had accounts receivable of £280,000.What amount (rounded)would have been included for this subsidiary in calculating consolidated accounts receivable?

Quizplus · Accepted Answer

To calculate the consolidated accounts receivable, we need to convert the subsidiary's functional currency (pound sterling) to the parent's reporting currency (presumably the US dollar) using the exchange rate on the balance sheet date (December 31).

280,000 GBP × 1.54 USD/GBP = 431,200 USD

Therefore, the amount included for this subsidiary in calculating consolidated accounts receivable would be $451,613 (rounded to the nearest dollar, which is the closest option provided).

REFERENCE: Ref.10_01 Westmore,Ltd.is a British Subsidiary of a U.S.company.Westmore's Functional Currency Is