Patents Are on the Books of a British Subsidiary of a U.S

question 34

Multiple Choice

Patents are on the books of a British subsidiary of a U.S. firm at a value of 50,000 pounds. The patents were acquired in 20X3 when the exchange rate was 1 pound = $1.50. The British subsidiary was acquired by the U.S. firm in 20X0 when the exchange rate was 1 pound = $1.40. The exchange rate on December 31, 20X4, the date of the most current balance sheet, is 1 pound = $1.55. The average rate of exchange for 20X4 is $1.53. What exchange rate will be used to remeasure patents for the consolidated statements dated December 31, 20X4?

• A) $1.40
• B) $1.50
• C) $1.53
• D) $1.55