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A foreign subsidiary uses the Temporal method, and beginning inventory was translated into $125,000 US dollars. Purchases during the year were FC 2,000,000 and ending inventory was 350,000 FC. Purchases were made evenly throughout the year. The company uses the FIFO cost flow assumption and ending inventory was purchased during the 4th quarter.
Exchange rates during the year were as follows:
Beginning of Year: 1 FC = $.25Average for the year 1 FC = $.30Average for the fourth quarter 1 FC = $.32End of the Year 1 FC = $.35 Problem 1: Compute the remeasured amount of Cost of Goods Sold for this subsidiary.
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