Elan,a U.S.corporation,completed the December 31,20X8,foreign currency translation of its 70 percent owned Swiss subsidiary's trial balance using the current rate method.The translation resulted in a debit adjustment of $25,000.The subsidiary had reported net income of 800,000 Swiss francs for 20X8 and paid dividends of 50,000 Swiss francs on September 1,20X8.The translation rates for the year were:
The January 1 balance of the Investment in the Swiss subsidiary account was $1,600,000.Elan acquired its interest in the Swiss subsidiary at book value with no differential or goodwill recorded at acquisition.

-Elan's Investment in Swiss subsidiary account at December 31,20X8,is:
A)$1,881,050.
B)$1,916,050.
C)$1,923,950.
D)$2,051,500.

Question

Elan,a U.S.corporation,completed the December 31,20X8,foreign currency translation of its 70 percent owned Swiss subsidiary's trial balance using the current rate method.The translation resulted in a debit adjustment of $25,000.The subsidiary had reported net income of 800,000 Swiss francs for 20X8 and paid dividends of 50,000 Swiss francs on September 1,20X8.The translation rates for the year were:
The January 1 balance of the Investment in the Swiss subsidiary account was $1,600,000.Elan acquired its interest in the Swiss subsidiary at book value with no differential or goodwill recorded at acquisition.
 
-Elan's Investment in Swiss subsidiary account at December 31,20X8,is:
A)$1,881,050. 
B)$1,916,050. 
C)$1,923,950. 
D)$2,051,500.

Quizplus · Accepted Answer

The correct investment value is calculated based on the financial data provided for Elan's Swiss subsidiary as of December 31, 20X8, which matches the amount of $1,881,050.

Elan,a USCorporation,completed the December 31,20X8,foreign Currency Translation of Its 70 Percent