A US Company's Foreign Subsidiary Had the Following Amounts in Stickles

question 80

Multiple Choice

A U.S. company's foreign subsidiary had the following amounts in stickles (§) , the functional currency, in 2011: $\begin{array}{lr}\text { Cost of goods sold } & \S 12,000,000 \\\text { Ending inventory } & 600,000 \\\text { Beginning inventory } & 240,000\end{array}$
The average exchange rate during 2011 was §1 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The exchange rate at December 31, 2011 was §1 = $.84. At what amount should the foreign subsidiary's cost of goods sold have been reflected in the 2011 U.S. dollar income statement?

• A) $11,253,600.
• B) $11,577,600.
• C) $11,520,000.
• D) $11,613,600.
• E) $11,523,600.

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Definitions:

Electric Company

A business entity that generates, transmits, distributes, or sells electricity to consumers and businesses.

Corporate Veil

The Corporate Veil is a legal concept that separates the actions and liabilities of a corporation from those of its shareholders, directors, and officers, protecting personal assets from business debts and obligations.

Shareholders Owners

Individuals or entities that own shares in a corporation, giving them certain rights and a stake in the company's performance.

Dividends

Payments made by a corporation to its shareholders, usually as a distribution of profits.