A Danish Subsidiary of a U

question 10

Multiple Choice

A Danish subsidiary of a U.S. corporation recorded a building it purchased in 2020 for 100,000,000 krone, when the exchange rate was $0.132/krone. The current exchange rate is $0.163/krone. Under the current rate method, how should the translated amount of the restated asset be interpreted?

• A) The U.S. parent would have to pay $16,300,000 to acquire the building today.
• B) The U.S. parent would have had to pay $13,200,000 to acquire the building in 2020.
• C) The building is worth $13,200,000 to the U.S. parent today.
• D) None of the above

---

Definitions:

Schedule Of Cash Collections

A detailed plan that shows when a company expects to receive cash from accounts receivable or other revenue sources.

Direct Labor Budget

A direct labor budget is a financial plan that estimates the total cost of direct labor required to meet the production needs of a business.

Direct Labor-hours

The total hours worked directly on the production of goods.

Merchandise Purchases Budget

A detailed plan used by a merchandising company that shows the amount of goods that must be purchased from suppliers during the period.