Marie Janssen, a financial analyst in Triofind’s Norvolt headquarters office, translates Triofind-B’s financial statements using the temporal method. Non-monetary assets are measured at cost under the lower of cost or market rule. Spot BRD/NER exchange rates are presented in Exhibit 1, and the balance sheet for Triofind-B is presented in Exhibit 2.
Exhibit 1
Spot BRD/NER Exchange Rates
| Date | BRD per NER |
|---|---|
| 30 June 2016 | 1.15 |
| Weighted-average rate when inventory was acquired (2016) | 1.19 |
| 31 December 2016 | 1.20 |
| Weighted-average rate when inventory was acquired (2017) | 1.18 |
| 30 June 2017 | 1.17 |
Exhibit 2
Triofind-B Balance Sheet for 2016 and 2017 (BRD)
| Assets | 31 December 2016 | 30 June 2017 | Liabilities and Stockholders’ Equity | 31 December 2016 | 30 June 2017 |
|---|---|---|---|---|---|
| Cash | 900,000 | 1,350,000 | Notes payable | 500,000 | 500,000 |
| Inventory | 750,000 | 500,000 | Common stock | 1,150,000 | 1,150,000 |
| Retained earnings | 200,000 | ||||
| Total | 1,650,000 | 1,850,000 | Total | 1,650,000 | 1,850,000 |
Based on Exhibits 1 and 2 and Janssen’s translation method, total assets for Triofind-B translated into Triofind’s presentation currency as of 31 December 2016 are closest to:
1. NER1,375,000.
2. NER1,380,252.
3. NER1,434,783.
How to solve this sum. Confused on which rate to take while calculating inventory,