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:

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A perceptual phenomenon where static images appear to be moving due to specific visual effects or construction.

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