Question

Bremmer Company's functional currency is the Euro. On February 1, 20X1, when the exchange rate is...

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

Homework Answers

Answer #1
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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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