CFA Practice Question

There are 334 practice questions for this study session.

CFA Practice Question

The German subsidiary of the U.S. firm Max. Co. has the following balance sheet information for its first year of operation (German Marks):

Cash: 100.
Inventory: 450.
Fixed assets (net): 780.
Total: 1,330.
Accounts payable: 120.
Common stock: 1,000.
Retained earnings: 90.
Total: 1,330.

The U.S. controller will use the all-current method for foreign currency translation, where the translation rate at the beginning of the year was 3.0 marks to the dollar, the average rate 3.5 marks to the dollar, and the year-end rate at 4 marks to the dollar.

Using the all-current method, inventory would be translated (to the nearest penny) at:

A. $112.50.
B. $128.57.
C. $150.00.
Correct Answer: A

User Contributed Comments 3

User Comment
danlan2 Use 4 marks for inventory.
ljamieson how about use ending fx rate for inventory
Querdenker Nice how AN predicts the breakdown of the Euro plus significant devaluation of the German Currency...
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