A U.S. company\'s foreign subsidiary had the following amounts in stickles (§),

Question

A U.S. company's foreign subsidiary had the following amounts in stickles (§), the functional currency, in 2013: The average exchange rate during 2013 was §1 = $.96. The beginning inventory was acquired when the exchange rate was §1 = $1.20. The ending inventory was acquired when the exchange rate was §1 = $.90. The exchange rate at December 31, 2013 was §1 = $.84. At what amount should the foreign subsidiary's cost of goods sold have been reflected in the 2013 U.S. dollar income statement?

A. $11,253,600.

B. $11,577,600.

C. $11,520,000.

D. $11,613,600.

E. $11,523,600.

At what amount should that foreign subsidiary's purchases have been reflected in the 2013 USD income statement?

A. $11,865,600

B. $11,577,600

C. $11,520,000

D. $11,613,600

E. $11,523,600

Explanation / Answer

Option D is 11,613,600

Closing exchange rate relevant for this transaction, the date on December 31,2013 rate,$0.84 is relevant for determination.

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