Park Co'S Wholly-Owned Subsidiary,Schnell Corp

question 37

Multiple Choice

Park Co.'s wholly-owned subsidiary,Schnell Corp. ,maintains its accounting records in German marks.Because all of Schnell's branch offices are in Switzerland,its functional currency is the Swiss franc.Remeasurement of Schnell's 20X1 financial statements resulted in a $7,600 gain,and translation of its financial statements resulted in an $8,100 gain.What amount should Park report as a foreign exchange gain in its income statement for the year ended December 31,20X1?

• A)$15,700
• B)$0
• C)$8,100
• D)$7,600

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Definitions:

Goods Sold

This term refers to the merchandise that has been purchased by consumers, indicating sales transactions that have been completed during a certain period.

Product Cost

The total expense incurred in manufacturing a product, including direct labor, direct materials, and overhead costs.

Period Cost

A type of expense that is not directly tied to the production of inventory and is instead associated with a specific time period, such as sales and administrative expenses.

Managerial Situation

A managerial situation involves the context and conditions under which managers make decisions, handle operations, and solve problems within an organization.