Question

Question 7 and 8 are based on the following information. Certain balance sheet accounts of a foreign subsidiary of the Horton Co. had been stated in U.S. dollars as follows: Current Rates Historical Rates 115,500 19,250 29,750 164,500 Accounts receivable 105,000 Prepaid insurance 17,500 Goodwill 28,000 Totals 150,500 7. If the subsidiary's local currency is its functional currency, what total amount should be included in Horton's balance sheet in U.S. dollars? A. $152,250. B. $164,500. C. $150,500. D. $154,000. 8. If the U.S. dollar is the functional currency of this subsidiary, what total amount should be included in Horton's balance sheet in U.S. dollars? A. $152,250. . $164,500. . $150,500. $154,000.

Answer 1

7. If the subsidiary's local currency is it's functional currency,the amount included in Horton's Balance Sheet in US dollars will be 164,500

8. If the US dollars is the functional currency of this subsidiary,the amount included in Horton's Balance Sheet in US dollars will be 150,500