Westmore Ltd. is a British subsidiary of a U.S. company. Westmore\'s functional

Question

Westmore Ltd. is a British subsidiary of a U.S. company. Westmore's functional currency is the pound sterling (£). The following exchange rates were in effect during 2018: Jan.1 £1 = $1.60 June 30 £1 = $1.64 Dec.31 £1 = $1.61 Weighted average rate for the year £1 = $1.59 Westmore reported sales of £1,500,000 during 2018. What amount (rounded) would have been included for this subsidiary in calculating consolidated sales? MULTIPLE CHOICE a.$2,415,000 b.$2,400,000 c.$2,385,000 d.$943,396 e. $931,677

Explanation / Answer

Amount (rounded) included by the subsidiary in calculating consolidated sales will be based on the weighted average rate for the year.

Weighted average rate for the year for £1 is $1.59

So, Amount of Sales is 1,500,000*1.59 = 2,385,000

Answer is C.

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