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

question 12

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/noncurrent 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:

Cost of Goods Sold

The direct costs attributable to the production of goods sold by a company, including materials and labor costs.

Production Budget

An estimate of the total cost of production, including raw materials, labor, and overhead, for a specific period.

Direct Materials

Raw materials that can be directly traced to the production of a specific product and are a significant portion of the product cost.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, usually to ensure liquidity.