South Company is a subsidiary of Pole Company and is located in Malaysia,where the currency is the ringgit.Data on South's inventory and purchases are as follows:
The beginning inventory was acquired during the fourth quarter of 20X3,and the ending inventory was acquired during the fourth quarter of 20X4.Purchases were made evenly during 20X4.Exchange rates were as follows:

-Based on the preceding information,the translation of cost of goods sold for 20X4,assuming that the Malaysian ringgit is the function currency is
A)$28,350.
B)$28,480.
C)$28,540.
D)$28,470.

Question

South Company is a subsidiary of Pole Company and is located in Malaysia,where the currency is the ringgit.Data on South's inventory and purchases are as follows:
  The beginning inventory was acquired during the fourth quarter of 20X3,and the ending inventory was acquired during the fourth quarter of 20X4.Purchases were made evenly during 20X4.Exchange rates were as follows:
 
-Based on the preceding information,the translation of cost of goods sold for 20X4,assuming that the Malaysian ringgit is the function currency is
A)$28,350. 
B)$28,480. 
C)$28,540. 
D)$28,470.

Quizplus · Accepted Answer

The cost of goods sold for 20X4 is $28,350,000. The Malaysian ringgit is the functional currency, so the cost of goods sold should be translated at the average exchange rate for the year, which is $0.285. This gives a translated cost of goods sold of $28,350,000 * $0.285 = $28,350.

South Company Is a Subsidiary of Pole Company and Is