Suppose the English Subsidiary of a U

question 30

Multiple Choice

Suppose the English subsidiary of a U.S. firm had current assets of £1 million, fixed assets of £2 million and current liabilities of 1 million pounds both at the start and at the end of the year. There are no long?term liabilities. If the pound depreciated during that year from $to $the translation gain (loss) to be included in the parent company's equity account according to FASB #52 is

• A) 0 since the current assets and current liabilities cancel
• B) +$200,000
• C) -$250,000
• D) -$400,000

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Definitions:

Nonprogrammed Decisions

Decisions that are made in response to unique, non-routine, and unpredictable circumstances, requiring creativity and critical thinking.

Information Deficiencies

Situations where there is a lack of necessary, relevant, or accurate information for decision-making or problem-solving.

Certain Environment

An environment that offers complete information on possible action alternatives and their consequences.

Probabilities

The measure of the likelihood that an event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.