Assume that US parent company ABC has a subsidiary XYZ in Outer Mongolia. XYZ's total assets are as follows in Mongolian marks:
cash and receivables 500,000
inventory 500,000
fixed assets (net) 900,000
The relevant exchange rates are:
OMM 1.6800 closing rate on the balance sheet date
OMM 1.5500 exchange rate when the fixed assets were acquired
OMM 1.6300 average exchange rate for the period
OMM 1.6600 average exchange rate when ending inventory was acquired
What is the total value of assets if the functional currency is the Outer Mongolian mark?
a. $1,130,952
b. $1,179,469
c. $1,175,883
d. $1,185,012