REFERENCE: Ref.10_05 a Subsidiary of Porter Inc. ,A U.S.company,was Located in a in a Foreign

question 6

Multiple Choice

REFERENCE: Ref.10_05
A subsidiary of Porter Inc. ,a U.S.company,was located in a foreign country.The functional currency of this subsidiary was the stickle (§) .The subsidiary acquired inventory on credit on November 1,2008,for §120,000 that was sold on January 17,2009 for §156,000.The subsidiary paid for the inventory on January 31,2009.Currency exchange rates between the dollar and the stickle were as follows:

-A historical exchange rate for a foreign subsidiary is best described as

• A)The rate at date of acquisition for a purchase transaction.
• B)The rate when the common stock was originally issued for a purchase transaction.
• C)The average rate from date of acquisition to the date of balance sheet.
• D)The rate from the prior year's balances.
• E)The January 1 exchange rate.

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Definitions:

Geographic Immobilities

The difficulties and barriers in moving jobs or resources across different geographic locations, affecting labor markets and resource allocation.

Unionization Rate

The percentage of a particular population of workers that belongs to labor unions; alternatively, the percentage of a population of workers that is represented by one union or another in collective bargaining.

Union Members

Individuals who belong to an organization that represents workers in negotiations with employers over wages, benefits, and working conditions.

Shirking

Shirking describes when employees underperform or exert less effort than expected because of insufficient incentives or the absence of effective monitoring.