The Net Assets of a Foreign Operation at 30 June

question 22

Multiple Choice

The net assets of a foreign operation at 30 June 2005 are constituted as assets of US$400,000 and liabilities of US$250,000. The parent entity purchased the foreign subsidiary on 1 July 2002. Exchange rate information is as follows:

The foreign operation has not traded during the year ended 30 June 2005, so the net assets remained unchanged during the period. What is the parent entity's foreign currency exposure for the year ended 30 June 2005?

• A) Foreign exchange gain $A197,185.
• B) Foreign exchange gain $A20,610.
• C) Foreign exchange gain $A342,310.
• D) Foreign exchange loss $A6,002.
• E) None of the given answers.

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Definitions:

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture, often accompanied by a general disdain for other cultures.

Europeans

Refers to the people originating from or associated with the continent of Europe.

Metal-Based Tools

Tools made from metals, used since ancient times for various purposes, including construction, manufacturing, and daily tasks, due to their strength and durability.

Immunities

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