What balances does a consolidated balance sheet report

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A Clarke Corporation subsidiary buys marketable equity securities and inventory on April 1, 2011, for 100,000 pesos each. It pays for both items on June 1, 2011, and they are still on hand at year-end. Inventory is carried at cost under the lower-of-cost-or-market-rule. Currency exchange rates for 1 peso follow:

Jan 1 2009 $0.15 = 1 peso
Apr 1, 2009 $0.16 = 1
Jun 1, 2009 $0.17 = 1
Dec 1, 2009 $0.19 = 1

A. Assume that the peso is the subsidiary's functional currency. What balances does a consolidated balance sheet report as of December 31, 2011?

B. Assume that the U.S. dollar is the subsidiary's functional currency. What balances does a consolidated balance sheet report as of December 31, 2011?

Reference no: EM13135822

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