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

question 75

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 remeasurement 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:

Pure Monopoly

A market structure where a single supplier provides a unique product or service without any close substitutes, giving it significant control over market prices.

Differentiated Products

Goods or services that are distinguished from similar offerings by unique characteristics, branding, quality, or performance, allowing companies to compete other than on price.

Standardized Products

Goods or services that are uniform in quality and specifications across producers, allowing them to be interchangeable.

Sequential Games

A type of game in game theory where players make decisions one after another, allowing for consideration of previous moves.