Placo Ltd, a Scottish Subsidiary of Limko, Inc $\quad$

question 10

Multiple Choice

Placo Ltd., a Scottish subsidiary of Limko, Inc., a U.S. company, showed cost of goods sold on its income statement for the year ended December 31, 2010.
$\begin{array}{c}\begin{array}{lll}\text {Inventory, \( 1 / 1 / 10 \) }\\\text {Purchases}\\\text {Cost of Goods Available for Sale}\\\text {Inventory, 12/31/10}\\\text {Cost of Goods Sold}\end{array}\begin{array}{r}£ 100,000 \\\underline{900,000} \\ 1,000,000 \\\underline{ 200,000} \\£ 800,000\end{array}\end{array}$

$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text { Exchange rates/£ }$
$\begin{array}{llcc} \text { December 31, 2010 } &\$ 0.522 \\ \text {December 31, 2009 } &\$ 0.560\\ \text { 2010 average } &\$ 0.547\\\end{array}$


-What amount should be used to consolidate Placo's cost of goods sold into Limko's income statement under the current rate method?

• A)$417,600
• B)$437,600
• C)$448,000
• D)$443,900

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Definitions:

Scatter Diagram

A graphical representation of two variable data points that helps to determine the relationship between them.

Linear Relationship

A type of relation between two variables where the change in one variable is directly proportional to the change in another variable.

Cross-Classification Table

A table that displays the frequency distribution of variables to show how they are distributed across each other.

Nominal Variables

Categories without a natural order or rank, such as gender, race, or religion, used for labeling variables.