Which combination of accounts and exchange rates is correct…

Which combination of accounts and exchange rates is correct for the re-measurement of a foreign entity’s financial statements from its recording currency to U.S. dollars? Answer Options Option Exchange rates Accounts A Weighted average Revenue, depreciation expense, cost of goods sold B Historical Property, plant & equipment; prepaid insurance; accounts payable C Historical Goodwill, inventories carried at cost, accounts receivable D Current Accounts receivable, bonds payable, accounts payable  

Penn Company’s receivable from a foreign customer is denomin…

Penn Company’s receivable from a foreign customer is denominated in the customer’s local currency. This receivable of 1,200,000 LCUs has been translated into $480,000 on Penn’s December 31, 20Y5 balance sheet. On January 15, 20Y6, the receivable was collected in full when the exchange rate was 3 LCU = $1. The journal entry Penn Company should make to record the collection of this receivable is: Option Accounts and Explanation Debit Credit A Foreign Currency Units 400,000 Exchange Loss  80,000 Accounts Receivable 480,000 B Foreign Currency Units 400,000 Accounts Receivable 400,000 C Foreign Currency Units 400,000 Deferred Exchange Loss 80,000 Accounts Receivable 480,000 D Foreign Currently Units 480,000 Accounts Receivable 480,000    

A wholly owned foreign subsidiary of Penn Corp. has certain…

A wholly owned foreign subsidiary of Penn Corp. has certain expense accounts for the year ended December 31, 20X4, stated in local currency units (LCU) as follow: Expense LCU Depreciation of Equipment (related assets were purchased January 2, 20Y2) 150,000 Provision for Uncollectible Accounts 90,000 Rent 250,000 The exchange rates at various dates were as follows: Date Dollar Equivalent of 1 LCU January 1, 20Y2 $0.60 December 31, 20Y4 $0.45 Average, 20Y4 $0.50   What total dollar amount should be included in Penn’s income statement to reflect the preceeding expenses for the year ended December 31, 20Y4? Answer Foreign Currency is Functional Currency    U.S. Dollar is Functional Currency A $245,000   $260,000 B $260,000  $245,000 C $220,500   $245,000 D $245,000 $220,500

Penn Corp., a U.S. company, bought machine parts from a Germ…

Penn Corp., a U.S. company, bought machine parts from a German company on March 1, 20Y1, for €40,000, when the spot rate for euros was $0.5200. Penn’s year-end was March 31, when the spot rate was $0.5150. On April 20, 20Y1, Penn paid the liability with €40,000 acquired at a rate of $0.5250. Penn’s income statements should report a foreign exchange gain or loss for the years ended March 31, 20Y1 and 20Y2, of:  Answer Options Option 20Y1 20Y2 A $0 $0 B $0 $400 Loss C $200 Gain $400 Loss D $200 Loss $400 Gain