A is corrent. When the functional currency of a foreign subsidiary is the local foreign currency, balance sheet accounts are translated using the current exchange rate (the rate in effect at the balance sheet date). Therefore, these accounts should be included in the balance sheet at $250,000. Note that if the functional currency was the US dollar, balance sheet accounts would be remeasured using a combination of historical and current rates.
B is incorrect. When the functional currency of a foreign subsidiary is the local foreign currency, balance sheet accounts are translated using the current exchange rate (the rate in effect at the balance sheet date). Therefore, these accounts should be included in the balance sheet at $250,000. Note that if the functional currency was the US dollar, balance sheet accounts would be remeasured using a combination of historical and current rates.
C is incorrect. When the functional currency of a foreign subsidiary is the local foreign currency, balance sheet accounts are translated using the current exchange rate (the rate in effect at the balance sheet date). Therefore, these accounts should be included in the balance sheet at $250,000. Note that if the functional currency was the US dollar, balance sheet accounts would be remeasured using a combination of historical and current rates.
D is incorrect. When the functional currency of a foreign subsidiary is the local foreign currency, balance sheet accounts are translated using the current exchange rate (the rate in effect at the balance sheet date). Therefore, these accounts should be included in the balance sheet at $250,000. Note that if the functional currency was the US dollar, balance sheet accounts would be remeasured using a combination of historical and current rates.
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