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what would be the increase in the current cost of majikstan enterprise rsquo s equip 543820

Now assume that Majikstan Enterprises is a foreign subsidiary of a U.S.-based multinational corporation and that its financial statements are consolidated with those of its U.S. parent. Relevant exchange rate and

Exchange rate:

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General Price Level Index:

Majikstan

U.S.

12/31/2010

MJR 4,400 = $1

30,000

281.5

Average 2011

MJR 4,800 = $1

32,900

292.5

12/31/2011

MJR 5,290 = $1

36,000

303.5

Required: What would be the increase in the current cost of Majikstan Enterprise’s equipment, net of inflation, when expressed in U.S. dollars under the restate-translate methodology? Under the translate restate method?

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