A 100 percent owned foreign subsidiary's trial balance consist of the account listed as follows. Which exchange rate - current, historical, or average would be used to translate these accounts to parent currency assuming that the foreign currency is the functional currency? Which rates would be used if the parent currency were the functional currency?
Trial Balance Accounts:
- Cash
- Marketable Securities (cost)
- Accounts receivable
- Inventory
- Equipment
- Accumulated depreciation
- Prepaid Expenses
- Due to parent (denominated in dollars)
- Bonds payable
- Deferred Income taxes
- Common Stock
- Premuim on common stock
- Retained earnings
- Sales
- Purchases
- Cost of sales
- General and administrative expenses
- Selling expenses
- Depreciation
- Amortization of goodwill
- Income tax expense
- Intercompany interest expense