(Solution) - Multiple Choice Questions 1 A German subsidiary of a U S parent -(2025 Original AI-Free Solution)

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Multiple Choice Questions
1. A German subsidiary of a U.S. parent reports its accounts in euros. Its functional currency, however, is the Swedish krona. You are responsible for changing the subsidiary's accounts into U.S. dollars in preparation for consolidation. Which statement is true regarding this procedure?
a. Remeasure the subsidiary's euro accounts into krona and then translate the krona accounts into U.S. dollars.
b. Translate the subsidiary's euro accounts into krona and then remeasure the krona accounts into U.S. dollars.
c. Remeasure the subsidiary's euro accounts into U.S. dollars.
d. Translate the subsidiary's euro accounts into U.S. dollars.
2. At the end of 2014, an Italian subsidiary of a U.S. parent reports ?1,000,000 in equipment purchased when the exchange rate was $l .40, and ?3,000,000 in equipment purchased when the exchange rate was $ 1.50. The average exchange rate for 2014 is $1.35, and the beginning and ending rates for 2014 are $1.42 and $1.31, respectively. If the Italian subsidiary's functional currency is the U.S. dollar, the equipment account, in U.S. dollars, is
a. $5,240,000
b. $5,350,000
c. $5,400,000
d. $5,900,000