FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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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) | 80,000 | |
| Rent expense | 10,000 | |
| Dividends (declared on 10/1/20) | 20,000 | |
| Notes receivable (to be collected in 2023) | 30,000 | |
| 24,000 | ||
| Salary payable | 5,000 | |
| Depreciation expense | 8,000 | |
The following U.S. $ per kuna exchange rates are applicable:
| January 1, 2019 | $0.13 |
| Average for 2019 | 0.14 |
| January 1, 2020 | 0.18 |
| March 1, 2020 | 0.19 |
| October 1, 2020 | 0.21 |
| December 31, 2020 | 0.22 |
| Average for 2020 | 0.20 |
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?
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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.)
Transcribed Image Text:### Financial Accounts Exchange Rate Table
This table is part of a financial educational resource, listing various financial accounts with a designated space to record exchange rates. Understanding these accounts is crucial for managing finances and keeping precise records. Here is the transcription of the table:
#### Table Columns
1. **Account**
2. **Exchange Rate**
#### Accounts Listed
- Sales
- Inventory
- Equipment
- Rent Expense
- Dividends
- Notes Receivable
- Accumulated Depreciation — Equipment
- Salary Payable
- Depreciation Expense
The table provides a structured layout to input or reference the exchange rates applicable to each account, which is essential for financial reporting and analysis, especially when dealing with international transactions.
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