Determine amount at which foreign subsidiarys cost of goods

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Reference no: EM133931836

Problem

A U.S. company's foreign subsidiary had these amounts in local currency units (LCU) in 2024:

Cost of goods sold LCU 5,760,000
Beginning inventory 549,000
Ending inventory 604,000

The average exchange rate during 2024 was $1.70 = LCU 1. The beginning inventory was acquired when the exchange rate was $1.50 = LCU 1. Ending inventory was acquired when the exchange rate was $1.80 = LCU 1. The exchange rate on December 31, 2024, was $1.85 = LCU 1. Get the instant assignment help.

Task

Assuming that the foreign country is highly inflationary, determine the amount at which the foreign subsidiary's cost of goods sold should be reflected in the U.S. dollar income statement.

Reference no: EM133931836

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