How should foreign exchange gains on translation

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Reference no: EM132841120

Problem 1: IQ has a wholly owned subsidiary in China. This subsidiary is dependent on IQ for financing and sales. How should foreign exchange gains on translation of the subsidiary's statements to Canadian dollars be reported on IQ's consolidated financial statements?

Problem 2: Which of the following accounts would be translated to the reporting currency at the current rate of exchange for an integrated subsidiary?

A) Sales occurring evenly throughout the year

B) Deposits received from customers for services to be rendered

C) Capital assets

D) Inventory carried at market under the lower-of-cost-or-market principle Question 3: What gives rise to accounting exposure to changes in the foreign exchange rate?

Reference no: EM132841120

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