Calculate dollar current-cost adjustment for cost of sales

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Reference no: EM131051402

Doosan Enterprises

Doosan Enterprises, a U.S. subsidiary domiciled in South Korea, accounts for its inventories on a FIFO basis. The company translates its inventories to dollars at the current rate. Year-end inventories are recorded at 10,920,000 won. During the year, the replacement cost of inventories increases by 20 percent. Inflation and exchange rate information are as follows:

January 1: Specific price index = 100;

$1 = KRW900

December 31: Specific price index = 120;

$1 = KRW1,170

Required:

Based on this information, calculate the dollar current-cost adjustment for cost of sales while avoiding a double-charge for inflation.

Reference no: EM131051402

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