REFERENCE: Ref.10_02 Darron Co.was Formed on January 1,2009 as a Wholly Owned

question 63

Multiple Choice

REFERENCE: Ref.10_02
Darron Co.was formed on January 1,2009 as a wholly owned foreign subsidiary of a U.S.corporation.Darron's functional currency was the stickle (§) .The following transactions and events occurred during 2007:
SHAPE \* MERGEFORMAT

-What exchange rate should have been used in translating Darron's revenues and expenses for 2009?

• A)$1 = §.48.
• B)$1 = §.44.
• C)$1 = §.46.
• D)$1 = §.42.
• E)$1 = §.45.

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Definitions:

Common-Size Statements

Financial statements that are expressed as a percentage of a certain figure, allowing for easier comparison across time periods and companies by standardizing the data.

Percentage Of Change

A mathematical calculation used to determine the percentage increase or decrease of a value over a period of time.

Quick Assets

Those assets— mainly cash, accounts receivable, and notes receivable—that can be easily turned into cash.

Current Liabilities

Obligations that will come due within one year or within the operating cycle, whichever is longer.