A Danish Subsidiary of a U

question 7

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 temporal 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

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Definitions:

Sales Mix

The combination of different products or services sold by a company, impacting its overall profitability and performance.

Croquet Set

A collection of equipment used for playing croquet, a lawn game involving hitting plastic or wooden balls through hoops with a mallet.

Volleyball Set

In the context of sports, it refers to a group of plays or the equipment used in the game of volleyball, but as a financial term, it's NO.

Markup Percentage

The percentage added to the cost price of goods to cover overhead and profit.