Aussie Ltd Has an Investment in Yankee Inc

question 7

Multiple Choice

Aussie Ltd has an investment in Yankee Inc. The shares in Yankee were acquired on 15 August 20X4. Yankee uses the revaluation model to account for land & buildings. A building which was acquired by Yankee on 1 April 20X2 was revalued on 15 March 20X9. The exchange rate used to translate the building into the presentation currency at 30 June 20X9 is the rate that applied on:

• A) 1 April 20X2
• B) 15 August 20X4
• C) 15 March 20X9
• D) 30 June 20X9

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Definitions:

Merchandise Company

A business that purchases and sells goods, often retail or wholesale, as its primary activity.

Form 1120S

A tax document used in the United States to report the earnings, losses, and dividends of S corporation shareholders.

Corporation

A legal entity that is separate and distinct from its owners. Corporations can own property, incur debts, sue, and be sued.

Permanent Accounts

Accounts in the general ledger that are not closed at the end of the accounting year, such as assets, liabilities, and equity accounts.