In 1995,Ajax Manufacturing's German Subsidiary Has the Following Balance Sheet

question 32

Multiple Choice

In 1995,Ajax Manufacturing's German subsidiary has the following balance sheet:
Suppose the DM appreciates from $0.70 to $0.76 during the period.
-Under the current rate method,what is Ajax's translation gain loss.?

• A)a gain of $294,000
• B)a gain of $192,000
• C)a loss of $174,000
• D)a loss of $12,000

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Definitions:

Fully Depreciated

An asset has reached the end of its useful life, and its book value is reduced to salvage value or zero.

Depreciation

The process of allocating the cost of a tangible asset over its useful life, reflecting its decrease in value over time.

Depreciable Cost

The total amount that can be depreciated over an asset's useful life, typically the cost of the asset minus its salvage value.

Obsolescence

The process of becoming outdated or no longer used, often due to technological advancements or changes in preferences.