Certain balance sheet accounts of a foreign subsidiary of Rose Company have been
ID: 2488116 • Letter: C
Question
Certain balance sheet accounts of a foreign subsidiary of Rose Company have been stated in U.S. dollars as follows:
1.
Required information
This subsidiary’s functional currency is a foreign currency. What total should Rose’s balance sheet include for the preceding items?
$550,000.
$543,000.
$561,000.
$548,000.
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2.
Required information
This subsidiary’s functional currency is the U.S. dollar. What total should Rose’s balance sheet include for the preceding items?
$543,000.
$548,000.
$550,000.
$561,000.
Stated at Current Rates Historical Rates Accounts receivable, current $ 271,000 $ 291,000 Accounts receivable, long term 122,000 133,000 Prepaid insurance 61,000 63,000 Goodwill 89,000 94,000 $ 543,000 $ 581,000Explanation / Answer
Answer 1 : $ 543,000 is correct (271,000+122,000+61,000+89,000)
Answer 2: $ 561,000 is correct (271,000+133,000+63,000+94,000)