Question

Megatron Corp. earned net income of 13 comma 000 Euros in its overseas branch at France. Its headquarters is located in the U.S. The rate of conversion during set up was $ 1.31 ​/ Euro. What is the value of its income in its home currency if the rate is $ 1.51 ​/ Euro at the end of a financial year and the average rate being $ 1.41 ​/ Euro?

Answer 1

Answer:

$18,330

Explanation:

For translation of income statement items such net income, the applicable rate is the average rate.

Since the average rate being is $1.41 ​/ Euro, we have:

Value of income in home currency = 13,000 euro * $1.41 = $18,330.