A French Subsidiary of a U

question 35

Essay

A French subsidiary of a U.S. firm keeps accounting records in euros. The U.S. dollar is considered the subsidiary's functional currency. Assume the following exchange rates:
Required:
Remeasure the following items from the December 31, 20X6 trial balance of the subsidiary:
a.Sales made evenly throughout 20X6 = 100,000 euros
b.Cost of goods sold = 30,000 euros5,000 euros purchased July 1, 20X525,000 euros purchased July 1, 20X6
c.Salary expense for 20X6 = 40,000 euros
d.Land = 1,000,000 euros200,000 euros purchased January 1, 20X5800,000 euros purchased July 1, 20X6

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Definitions:

Accounts Receivable

Funds that customers owe to a business for goods or services already provided but not yet compensated for.

Sales Tax Payable

A liability account that accumulates the collected sales tax from customers to be remitted to the respective tax authorities.

Asset Account

An asset account is a category in the financial statements that reports the value of a company's assets, such as cash, inventory, property, and equipment.

Liability Account

A type of accounting ledger entry that represents a company's legal debts or financial obligations that arise during business operations.