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Mex Ltd. is an integrated foreign subsidiary At the end of the current year the inventory of the company was as follows Cost 14862000 pesos Net realizable value 12100000 pesos Applying the

Mex Ltd. is an integrated foreign subsidiary At the end of the current year the inventory of the company was as follows Cost 14862000 pesos Net realizable value 12100000 pesos Applying the

Mex Ltd. is an integrated foreign subsidiary. At the end of the current year, the inventory of the company was as follows:

Cost

14,862,000 pesos

Net realizable value

12,100,000 pesos

Applying the lower of cost and net realizable value, the company wrote the inventory down by Ps2,762,000 for presentation in its financial statements. When these financial statements were received by the parent company in Canada for translation, it was determined that the year-end spot rate was $1 5 Ps382. The closing inventory at cost is composed of the following:

 

Amount

Historical

Purchase

n pesos

 

1

$1 5 Ps341

$1 5 Ps341

2

$1 5 Ps360

$1 5 Ps360

3

$1 5 Ps375

$1 5 Ps375

Required:

(a) At what amount would the inventory be shown on the translated balance sheet of Mex? And what amount of loss from write-down would appear on the translated income statement?

(b) If the year-end spot rate was $1 5 Ps281, at what amount would the inventory be shown on the translated balance sheet? And what amount of loss from write-down would appear on the translated income statement?

Tripti 09-Jul-2020

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