Advanced Accounting 10th Edition by Thomas Schaefer, Joe Ben Hoyle, Timothy Doupnik

Exercise 3

On January 1, Dandu Corporation started a subsidiary in a foreign country.On April 1, the subsidiary purchased inventory at a cost of 120,000 local currency units (LCU).One-fourth of this inventory remained unsold at the end of the year while 40 percent of the liability from the purchase had not yet been paid.The exchange rates for $1 were as follows: What should be the December 31 Inventory and Accounts Payable balances for this foreign subsidiary as translated into U.S.dollars using the current rate method