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

question 64

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 20X0 when the exchange rate was 1 pound = $1.50. The British subsidiary was acquired by the U.S. firm in 20X3 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. Assuming the dollar is the functional currency of the subsidiary, 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

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Definitions:

Missouri Compromise

An agreement passed in 1820 admitting Missouri as a slave state and Maine as a free state, to maintain the balance of power between North and South.

Fugitive Slave Law

Refers to the laws enacted by the United States Congress in 1793 and 1850 that mandated the return of runaway slaves to their owners.

Underground Railroad

A network of secret routes and safe houses used in the United States during the early to mid-19th century to help African slaves escape to free states and Canada.

Slaves Escaped

Refers to the action of enslaved African Americans fleeing from bondage in search of freedom, often via networks like the Underground Railroad.