Question
Please someone to give me answers.
ialements? S on a hedge of a net investment in EXERCISES Elelation/remeasurement differences trailssubsidiary of a U.S. firm has the British pound as its functional currency. Under the provisions of ASC AGr, the U.S. dollar from the subsidiary's viewpoint would be 830, the ary f Its local currency b Its recording currency c A foreign currency d None of the above Wh of a Accounts receivable b Inventories c Machinery d Prepaid insurance of the folowing foreign subsidiary accounts will be converted into the same number of U.S. dolars,regardles a which one of the following items from the financial statements of a foreign subsidiary would be translated into dollars using the historical exchange rate? a Accounts payable Amortization of bond premium c Common stock d Inventories exchange rates are used to translate certain items from foreign income statements into U.S. dollars.Such averages are used to Approximate the effects of using the current exchange rates in effect on the transaction dates Avoid using different exchange rates for some revenue and expense accounts Eliminate large and temporary fluctuations in exchange rates that may reverse in the near future d Smooth out large exchange gains and losses 5. Pal, a U.S. Corporation, made a long-term, dollar-denominated loan of $600,000 to its British subsidiary on January 1.2016, when the exchange rate for British pounds was $1.53. If the subsidiary's functional currency is its local currency, this transaction is a foreign currency transaction of: a The parent company but not the subsidiary b The subsidiary company but not the parent c Both the subsidiary and the parent d Neither the subsidiary nor the parent 6. Sum is a 100 percent-owned subsidiary of a U.S. corporation. The country in which Sum is located has been deter- mined to have a highly inflationary economy. Given this information, the functional currency of Sum is: a Its local currency b The U.S. dollar c Its recording currency d None of the above
Explanation / Answer
As Per Chegg Policy, we are required to do first question in case of multiple questions
ASC 830 deals with Accounting and reporting requirements for foreigh currency transactions
It also applies to consolidation of financial statements of a Subsidiary (German Co.) denominated into foreign curreny (British Pound) into the reporting currency (U.S. Dollar) of the parent ( US Co.)
So From Subsidiary Point of view U.S. Dollar is reporting currency