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

question 35

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 2016 when the exchange rate was 1 pound = $1.50.The British subsidiary was acquired by the U.S.firm in 20X0 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 pound is the functional currency of the subsidiary, what exchange rate will be used to translate patents for the consolidated statements dated December 31, 2017?

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

Understand the impact of changes in the price level on consumption, investment, and net exports.

Acknowledge the reasons for and effects of economic fluctuations.

Understand how changes in the money supply affect interest rates, investment spending, and aggregate demand.

Recognize the effects of economic perceptions and uncertainties on investment spending and aggregate demand.

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Definitions:

Stress Relief

Techniques or activities designed to reduce stress and its negative impacts on one’s physical and mental health.

Stress Reduction

Strategies or techniques used to decrease stress levels in individuals.

Vulnerable to Alcoholism

A higher susceptibility or likelihood of developing alcoholism based on genetic, psychological, or environmental factors.

Relieves Stress

Actions or practices that reduce tension, anxiety, or the physiological impact of stress on the body.