Question #24 - Reading 10 Multinational Operations

Reading: Reading 10 Multinational Operations

PDF File: Reading 10 Multinational Operations.pdf

Page: 13

Status: Incorrect

Correct Answer: A

Your Answer: B

Shared Context

- On APJ's 2005 income statement, the level of net income in U.S. dollars would be: A) $200.00. B) $240.00. C) $300.00.

Question

On APJ's 2005 balance sheet, the level of common stock (not including retained earnings) in U.S. dollars would be:

Answer Choices:

A. $360

B. $288

C. $240

Explanation

Since the Australian dollar is the local and the functional currency, use the current rate method. In the balance sheet, all accounts are translated at the current exchange rate, except for the common stock account, which is translated at the historical rate. Common Stock (720 / 2) = 360

Actions

Practice Flashcards