Certain balance sheet accounts of a foreign subsidiary of Parker Company at December 31, 2011, have been restated into U.S. dollars as follows:
-Assuming the functional currency of the subsidiary is the local currency, what total should be included in Parker's consolidated balance sheet at December 31, 2011, for the above items?

Question

Certain balance sheet accounts of a foreign subsidiary of Parker Company at December 31, 2011, have been restated into U.S. dollars as follows: 
-Assuming the functional currency of the subsidiary is the local currency, what total should be included in Parker's consolidated balance sheet at December 31, 2011, for the above items?

Quizplus · Accepted Answer

To determine the total to be included in Parker's consolidated balance sheet, we need to convert the restated values into the functional currency of the subsidiary. As the functional currency is the local currency, no further conversion is required.

Adding up the restated values, we get:

Cash and cash equivalents: $60,000
Accounts receivable: $180,000
Inventory: $134,000
Land: $44,000
Buildings: $247,000
Total: $665,000

Therefore, the total to be included in Parker's consolidated balance sheet is $418,000 (assuming the subsidiary's accounts are fully consolidated).

Certain Balance Sheet Accounts of a Foreign Subsidiary of Parker