REFERENCE: Ref.10_02
Darron Co.was formed on January 1,2009 as a wholly owned foreign subsidiary of a U.S.corporation.Darron's functional currency was the stickle (§).The following transactions and events occurred during 2007:
SHAPE \* MERGEFORMAT

-What exchange rate should have been used in translating Darron's revenues and expenses for 2009?

Question

REFERENCE: Ref.10_02
Darron Co.was formed on January 1,2009 as a wholly owned foreign subsidiary of a U.S.corporation.Darron's functional currency was the stickle (§).The following transactions and events occurred during 2007:
SHAPE \* MERGEFORMAT
 
-What exchange rate should have been used in translating Darron's revenues and expenses for 2009?

Quizplus · Accepted Answer

To translate Darron's revenues and expenses for 2009, we need to use the average exchange rate for the year. The given table provides the monthly rates and their percentages. To calculate the average, we take a weighted average of these rates based on the number of days in each month:

((.46*31) + (.44*28) + (.44*31) + (.43*30) + (.44*31) + (.44*30) + (.46*31) + (.47*31) + (.49*30) + (.48*31) + (.45*30) + (.44*31))/365 = .4499

Therefore, the exchange rate that should have been used is $1 = §.44.

REFERENCE: Ref.10_02 Darron Co.was Formed on January 1,2009 as a Wholly Owned