A US Company Has a Subsidiary Located in Great Britain

question 64

Multiple Choice

A U.S. company has a subsidiary located in Great Britain. Information for the subsidiary for the year ended December 31, 2006, is as follows:
$\begin{array}{ll}&\text { British pound }\\\text { Gross profit margin } & 40 \% \\\text { Inventory } & 2,000\\\\&\text { Exchange Rate }\\\text { Balance sheet date } & 1 \text { pound }=\$ 1.6 \\\text { Average exchange rate } & 1 \text { pound }=\$ 1.5 \\\text { Historical rate } & 1 \text { pound }=\$ 1.4\end{array}$

-If sales were 3,000 in British pounds for the fiscal year and the temporal method was used, what would this be in U.S. dollars?

• A)$4,800
• B)$4,500
• C)$4,200
• D)$4,000

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The process of encouraging creativity, innovation, and critical thinking by challenging existing assumptions and encouraging exploration of new ideas.

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A measurement system that has a fixed starting point or zero value, facilitating the comparison of absolute quantities.