A Foreign Subsidiary Uses the First-In First-Out Inventory Method

question 23

Multiple Choice

A foreign subsidiary uses the first-in first-out inventory method. The following inventory balances are given at December 31, 2011 in local currency units (LCU) : Compute the December 31, 2011, inventory balance using the current rate method.

• A) $454,400.
• B) $457,600.
• C) $596,400.
• D) $568,000.
• E) $426,000.

---

Definitions:

Balance Sheet Columns

Sections within the balance sheet that categorize assets, liabilities, and equity accounts to display a company's financial position at a specific point in time.

Net Income

Net income is the total profit of a company after all expenses, taxes, and costs have been deducted from total revenue.

Retained Earnings

The portion of net income left over for the business after it has paid out dividends to its shareholders, which is reinvested in the business.

Annual Revenues

The total amount of money received by a company for goods sold or services provided during a fiscal year.