A subsidiary of Reynolds Inc., a U.S. company, was located in a foreign country. The local currency of this subsidiary was the Euro (€) while the functional currency of this subsidiary was the U.S. dollar. The subsidia acquired Equipment A on January 1, 2018, for €250,000. Depreciation expense associated with Equipment A was €25,000 per year. On January 1, 2020, the subsidiary acquired Equipment B for €150,000 and Equipment B had associated depreciation expense of €10,000. The subsidiary owned no other depreciable assets. Currency exchange rates between the U.S. dollar and the Euro were as follows: January 1, 2018 December 31, 2018. 2018 Average January 1, 2019 December 31, 2019 2019 Average January 1, 2020 December 31, 2020 2020 Average Multiple Choice What amount would have been reported for depreciation expense related to the equipment owned by the subsidiary in Reynolds's consolidated balance sheet at December 31, 2018? O C $29,500. $28,500. $30,000. $12,000. €1 = $1.20 €1 $1.14 €1 €1 $11.800. $1.18 $1.15 €1= $1.21 €1= $1.18 €1 $1.26 $1.30 $1.28 €1 €1

A subsidiary of Reynolds Inc., a U.S. company, was located in a foreign country. The local currency of this subsidiary was the Euro (€) while the functional currency of this subsidiary was the U.S. dollar. The subsidia acquired Equipment A on January 1, 2018, for €250,000. Depreciation expense associated with Equipment A was €25,000 per year. On January 1, 2020, the subsidiary acquired Equipment B for €150,000 and Equipment B had associated depreciation expense of €10,000. The subsidiary owned no other depreciable assets. Currency exchange rates between the U.S. dollar and the Euro were as follows: January 1, 2018 December 31, 2018. 2018 Average January 1, 2019 December 31, 2019 2019 Average January 1, 2020 December 31, 2020 2020 Average Multiple Choice What amount would have been reported for depreciation expense related to the equipment owned by the subsidiary in Reynolds's consolidated balance sheet at December 31, 2018? O C $29,500. $28,500. $30,000. $12,000. €1 = $1.20 €1 $1.14 €1 €1 $11.800. $1.18 $1.15 €1= $1.21 €1= $1.18 €1 $1.26 $1.30 $1.28 €1 €1

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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