Business, 20.10.2021 14:00 perezsamantha3oqr0za

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 subsidiary 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 €1 = $1.20
December 31, 2018 €1 = $1.14
2018 Average €1 = $1.18
January 1, 2019 €1 = $1.15
December 31, 2019 €1 = $1.21
2019 Average €1 = $1.18
January 1, 2020 €1 = $1.26
December 31, 2020 €1 = $1.30
2020 Average €1 = $1.28

Required:
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?

Answers: 1

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A subsidiary of Reynolds Inc., a U. S. company, was located in a foreign country. The local currency...

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