Question

SEE ATTACHMENTS

Lancer, Inc. (a U.S.-based company), establishes a subsidiary in Croatia on January 1, 2019. The following account balances for the year ending December 31, 2020, are stated in kuna (K), the local currency:


Sales K 200,000
Inventory (bought on 3/1/20) 100,000
Equipment (bought on 1/1/19) 60,000
Rent expense 12,000
Dividends (declared on 10/1/20) 22,000
Notes receivable (to be collected in 2023) 36,000
Accumulated depreciation—equipment 18,000
Salary payable 5,000
Depreciation expense 6,000


The following U.S.$ per kuna exchange rates are applicable:


January 1, 2019 $0.19
Average for 2019 0.20
January 1, 2020 0.24
March 1, 2020 0.25
October 1, 2020 0.27
December 31, 2020 0.28
Average for 2020 0.26


Lancer is preparing account balances to produce consolidated financial statements.



Assuming that the kuna is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements?

Assuming that the U.S. dollar is the functional currency, what exchange rate would be used to report each of these accounts in U.S. dollar consolidated financial statements?



(For all requirements, round your answers to 2 decimal places.)

Answer 1

The question is about what currency rates will be used if

Assuming Kuna is the functional currency preparing accounts in US$  

Sales $769,230.77

Inventory $400,000

Equipment $315,789.47

Rent Expense $46,153.85

Dividends $81,481.48

Notes Receivable $138,461.54

Accumulated Depreciation - Equipment $69,230.77

Salary Payable $19,230.77

Depreciation Expense $23,076.72

If US$ is the functional currency, preparing accounts in Kuna

Sales K 200,000

Inventory K 100,000

Equipment K 60,000

Rent Expense K 12,000

Dividends K 22,000

Notes Receivable K 36,000

Accumulated Depreciation - Equipment K 18,000

Salary Payable K 5,000

Depreciation Expense K 6,000

Learn more at https://brainly.com/question/20060432