Reference no: EM133156136

Question - Elmer acquired all outstanding stock of Fudd on 1/1/X0 for $2,000,000. The book value of Fudd's assets of $1,750,000 represented the fair value, with the exception of an unrecorded intangible asset with a 10 year life of $250,000. Elmer's reporting currency is the Euro, while Fudd's functional currency is the US$. Relevant exchange rates were:

Jan 1 , 20X0 $1=$€1.25

Dec 31, 20X0 $1=$€1.27

Weighted Avg for the year $1=€1.28

What is the amount that the intangible asset and amortization expense will be recorded in the consolidated financial statements for the year ended 12/31/X0?

a. €317,500 (Asset), €32,000(Expense)

b. €285,750(Asset), €32,000(Expense)

c. €281,250 (Asset), €32,000(Expense)

d. €285,750(Asset), €31,250(Expense)

e. €281,250 (Asset), €31,250(Expense)