Question

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

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.