If the functional currency is the local currency of a foreign subsidiary, what exchange

rates should be used to translate the items below, assuming the foreign subsidiary is
in a country which has not experienced hyperinflation over three years?
1)   Equipment
2)   Inventories
3)   Depreciation Expense

1)   Current Rate       2)   Current Rate       3)   Average Rate

A subsidiary of Salisbury, Inc. located in a foreign country whose functional currency

is the foreign currency (which is not currency of a hyperinflationary economy). The
subsidiary acquires inventory on credit on November 1,2017, for 100,000 foreign
currencies (FC) that is sold on January 17,2018 for 130,000 foreign currencies (FC).
The subsidiary pays for the inventory on January 31,2010. Currency exchange rates
for 1 foreign currency (FC) are as follows:
November 1 ,2017 P0.16 = 1
FC
December 31,2017 0.17 = 1
January 17,2018 0.18 = 1
January 31,2018 0.19 = 1
Average for 2018 0.20 = 1
What amount does Salisbury’s consolidated balance sheet report for this inventory
at December 31,2017?

P17,000