Question #7
Reading: Reading 10 Multinational Operations
PDF File: Reading 10 Multinational Operations.pdf
Page: 4
Status: Incorrect
Correct Answer: A
Your Answer: B
Part of Context Group: Q7-8
First in Group
Shared Context
Question
The level of retained earnings on the remeasured 20X8 balance sheet would be:
Answer Choices:
A. $101
B. $85
C. $305
Explanation
To get this value, we need to finish remeasuring our balance sheet at the appropriate
rates. The retained earnings figure will be what makes the balance sheet balance.
Scud Co. Int'l
Balance Sheet (in SF thousands)
Dec. 31, 20X8
Remeasured $
Cash & A/R
600 × 0.85 =
510
Inventory
500 × 0.77 =
385
Net Fixed Assets
600 × 0.77 =
462
Total Assets
1,700
1,357
A/P
200 × 0.85 =
170
Long-term debt
100 × 0.85 =
85
Common Stock
1,300 × 0.77 =
1001
Retained Earnings
100
101
Total Liabilities and Owner's Equity
1,700
1,357