A Company Using the Periodic Inventory System Has Merchandise Inventory

question 170

Multiple Choice

A company using the periodic inventory system has merchandise inventory costing $210 on hand at the beginning of the period.During the period,merchandise costing $635 is purchased.At year-end,merchandise inventory costing $160 is on hand.The cost of merchandise sold for the year is

• A)$795
• B)$685
• C)$265
• D)$635

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Definitions:

Foreign Subsidiary

A company owned or controlled by another company (the parent company) but located and operating in a foreign country.

Cumulative Translation Adjustment

An entry in the accumulated other comprehensive income section of a translated balance sheet summarizing the gains or losses from currency translation differences.

Remeasurement Gain or Loss

A financial result that occurs when the value of a foreign currency transaction is adjusted to reflect exchange rate changes at the balance sheet date.

Parent Company

A corporation that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors.