A U.S.-owned foreign subsidiary has the following beginning and ending stockholders' equity for 20X1:
The change in common stock resulted from a sale of stock to the parent firm on May 15. The change in retained earnings resulted from a July 1 dividend of 10,000 FC and net income for 20X1. Various exchange rates were as follows:
$\begin{array}{lc}
\text { Date } & 1 \mathrm{FC} \text { equal to } \
\text { January } 1,20 \mathrm{X} 1 & \$ 1.10 \
\text { May } 15,20 \mathrm{X} 1 & \$ 1.12 \
\text { July } 1,20 \mathrm{X} 1 & \$ 1.13 \
\text { December } 31,20 \mathrm{X} 1 & \$ 1.15 \
\text { 20X1 average } & \$ 1.125
\end{array}$ Required:
Compute the 20X1 translation adjustment for the foreign subsidiary.

Question

A U.S.-owned foreign subsidiary has the following beginning and ending stockholders' equity for 20X1:
  The change in common stock resulted from a sale of stock to the parent firm on May 15. The change in retained earnings resulted from a July 1 dividend of 10,000 FC and net income for 20X1. Various exchange rates were as follows:
 $\begin{array}{lc}
\text { Date } & 1 \mathrm{FC} \text { equal to } \
\text { January } 1,20 \mathrm{X} 1 & \$ 1.10 \
\text { May } 15,20 \mathrm{X} 1 & \$ 1.12 \
\text { July } 1,20 \mathrm{X} 1 & \$ 1.13 \
\text { December } 31,20 \mathrm{X} 1 & \$ 1.15 \
\text { 20X1 average } & \$ 1.125
\end{array}$ Required:
Compute the 20X1 translation adjustment for the foreign subsidiary.

Quizplus · Accepted Answer

The Answer of A U.S.-owned foreign subsidiary has the following beginning and ending stockholders' equity for 20X1:
  The change in common stock resulted from a sale of stock to the parent firm on May 15. The change in retained earnings resulted from a July 1 dividend of 10,000 FC and net income for 20X1. Various exchange rates were as follows:
 $\begin{array}{lc}
\text { Date } & 1 \mathrm{FC} \text { equal to } \
\text { January } 1,20 \mathrm{X} 1 & \$ 1.10 \
\text { May } 15,20 \mathrm{X} 1 & \$ 1.12 \
\text { July } 1,20 \mathrm{X} 1 & \$ 1.13 \
\text { December } 31,20 \mathrm{X} 1 & \$ 1.15 \
\text { 20X1 average } & \$ 1.125
\end{array}$ Required:
Compute the 20X1 translation adjustment for the foreign subsidiary.

A US-Owned Foreign Subsidiary Has the Following Beginning and Ending Stockholders