Patents Are on the Books of a British Subsidiary of a U.S.firm

question 20

Multiple Choice

Patents are on the books of a British subsidiary of a U.S.firm at a value of 50,000 pounds.The patents were acquired in 20X0 when the exchange rate was 1 pound = $1.50.The British subsidiary was acquired by the U.S.firm in 2016 when the exchange rate was 1 pound = $1.40.The exchange rate on December 31, 2017, the date of the most current balance sheet, is 1 pound = $1.55.The average rate of exchange for 2017 is $1.53.Assuming the dollar is the functional currency of the subsidiary, what exchange rate will be used to re-measure patents for the consolidated statements dated December 31, 2017?

• A)​$1.40
• B)​$1.50
• C)​$1.53
• D)​$1.55

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Definitions:

Constructive Play

Play in which children manipulate objects to produce or build something.

Functional Play

Play that involves simple, repetitive activities typical of three-year-olds.

Parallel Play

Action in which children play with similar toys, in a similar manner, but do not interact with each other.

Cooperative Play

Play in which children genuinely interact with one another, taking turns, playing games, or devising contests.