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

question 92

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:

-How is the disposition of the translated gain or loss reported on the parent company's financial statements?

• A)Net income/loss on the income statement.
• B)Cumulative translation adjustment as a deferred asset.
• C)Cumulative translation adjustment as a deferred liability.
• D)Other comprehensive income.
• E)Retained earnings.

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Definitions:

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