Bremmer Company's functional currency is the Euro. On February
1, 20X1, when the exchange rate is $1.20 per Euro, Bremmer
purchases 100 units of inventory for a total purchase price of
4,300 Euros. Bremmer sells half of the inventory on March 24 and
the other half on April 14. The exchange rate is $1.17 on March 24
and $1.21 on April 14.
If Bremmer were to keep records denominated in U.S. dollars, the
company would recognize the sale of inventory April 14, by
crediting cost of goods sold for:
A.) 2601.50
B.) 2515.50
C.) 2580.00
D.) 2558.50
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Bremmer Company | Amount | Note |
Cost of goods purchased in Euro | 4,300.00 | A |
Exchange rate | 1.20 | B |
Cost of goods purchased in US $ | 5,160.00 | C=A*B |
% of goods sold on 14th April | 50% | D |
Cost of goods sold on 14th April | 2,580.00 | E=C*D |
So answer is option C. $ 2,580. |
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