Doosan Enterprises, a U.S. subsidiary domiciled in South Korea, accounts for its inventories on a FIFO basis. The company translates its inventories to dollars at the current rate. Year-end...

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Doosan Enterprises, a U.S. subsidiary domiciled in South Korea, accounts for its inventories on a FIFO basis. The company translates its inventories to dollars at the current rate. Year-end inventories are recorded at 10,920,000 won. During the year, the replacement cost of inventories increases by 20 percent. Inflation and exchange rate information are as follows:
January 1: Specific price index = 100;
$1 = KRW900
December 31: Specific price index = 120;
$1 = KRW1,170

Required:
Based on this information, calculate the dollar current-cost adjustment for cost of sales while avoiding a double-charge for inflation.

Answered Same Day Dec 21, 2021

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David answered on Dec 21 2021

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Doosan Enterprises, a U.S. subsidiary domiciled in South Korea, accounts for its inventories on a FIFO basis. The company translates its inventories to dollars at the current rate. Year-end...

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