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A U.S. company acquired a Malaysian subsidiary on January 1, 2017. At the date of acquisition,...

A U.S. company acquired a Malaysian subsidiary on January 1, 2017. At the date of acquisition, the subsidiary reported plant assets of RM1,000,000. During 2017, it acquired plant assets of RM200,000 and reported depreciation expense of RM150,000, of which RM20,000 related to plant assets acquired in 2017. The U.S.$/RM exchange rate was $0.25 on January 1, 2017, $0.22 when the new plant assets were acquired, $0.20 at the end of the year, and the 2017 average rate was $0.23. What is the subsidiary’s remeasured depreciation expense for 2017?

A. $36,900 B. $37,100 C. $34,500 D. $30,000

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A U.S. company
Depreciation expense should be calculated at average rate.
Calculation amount Amount Note
Depreciation expense (RM) 150,000.00 A
Average rate for the year                0.23 B
Depreciation expense ($)     34,500.00 C=A*B
So answer is option C. $ 34,500.
answered by: anonymous
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