Redline Products, Inc. is a US-based multinational with subsidiaries around the world. One such…

Redline Products, Inc. is a US-based multinational with subsidiaries around the world. One such…

Redline Products, Inc. is a US-based multinational with subsidiaries around the world. One such subsidiary,  Acceletron, operates in Singapore, which has seen mild but not excessive rates

of inflation.  Acceletron was acquired in 2000 and has never paid a dividend. It records inventory

using the FIFO method. Chief Financial Officer Margot Villiers was asked by Redline’s board of directors to explain how the functional currency selection and other accounting choices affect  Redline’s consolidated financial statements. Villiers gathers Acceletron’s financial statements denominated in Singapore dollars (SGD) in Exhibit 1 and the US dollar/Singapore dollar exchange rates in Exhibit 2. She

does not intend to identify the functional currency actually in use but rather to use Acceletron as an example of how the choice of functional currency affects the consolidated statements.

 

When translating Acceletron’s financial statements into US dollars, Redline is least likely to use an exchange rate of USD per SGD:

A. 0.671.

B. 0.588.

C. 0.654.

 

 

Redline Products, Inc. is a US-based multinational with subsidiaries around the world. One such…

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This paper was answered on 30-sep-2017