A USCompany's Foreign Subsidiary Had the Following Amounts in Stickles (§),The

question 84

Multiple Choice

A U.S.company's foreign subsidiary had the following amounts in stickles (§) ,the functional currency,in 2018:
$$\begin{array} { l r } \text { Cost of goods sold } & \S 12,000,000 \\\text { Ending inventory } & 600,000 \\\text { Beginning inventory } & 240,000\end{array}$$
The average exchange rate during 2018 was §1 = $.96.The beginning inventory was acquired when the exchange rate was §1 = $1.20.The ending inventory was acquired when the exchange rate was §1 = $.90.The exchange rate at December 31,2018 was §1 = $.84.Assuming that the foreign nation for the subsidiary had a highly inflationary economy,at what amount should that foreign subsidiary's purchases have been reflected in the 2018 U.S.dollar income statement?

• A)$11,865,600.
• B)$11,577,600.
• C)$11,520,000.
• D)$11,613,600.
• E)$11,523,600.

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Definitions:

Extracted Ore

Raw minerals taken from the ground, which may be processed to extract valuable metals or other resources.

Loss On Disposal

The financial loss incurred when disposing of an asset for less than its book value or carrying amount.

Gain On Disposal

The profit realized from the sale of a fixed asset, such as machinery or real estate, above its book value.

Accumulated Depreciation

Refers to the total amount of depreciation expense that has been recorded for an asset since it was acquired, representing the asset's wear and tear over time.