The December 31, 2020 trial balance of Aldo, a British subsidiary of Walton Corporation, appears below, expressed in pounds. The pound sterling is Aldo's functional currency.
Additional information:
1. The balance in the cumulative translation adjustment account at December 31, 2019 was $3,400 (credit).
2. The dollar balance of translated retained earnings at December 31, 2019 was $1,200.
3. When Aldo was acquired by Walton, the exchange rate was $1.20/£. No capital stock changes have occurred since then.
4. Exchange rates ($/£) were as follows:
January 1, 2020 $1.40
Average for 2020 1.34
December 31, 2020 1.30
5. Sales, purchases, and expenses other than depreciation occurred evenly throughout the year. The ending inventories were purchased when the exchange rate was $1.33.
6. Aldo acquired its plant and equipment prior to its acquisition by Walton, when the exchange rate was $1.10.
Required
a. Prepare a schedule calculating the translation gain or loss for 2020.
b. Prepare Aldo's translated trial balance at December 31, 2020.
c. Prepare Aldo's translated balance sheet at December 31, 2020.

Question

The December 31, 2020 trial balance of Aldo, a British subsidiary of Walton Corporation, appears below, expressed in pounds. The pound sterling is Aldo's functional currency.
  Additional information:
1. The balance in the cumulative translation adjustment account at December 31, 2019 was $3,400 (credit).
2. The dollar balance of translated retained earnings at December 31, 2019 was $1,200.
3. When Aldo was acquired by Walton, the exchange rate was $1.20/£. No capital stock changes have occurred since then.
 4. Exchange rates ($/£) were as follows:
January 1, 2020 $1.40
Average for 2020 1.34
December 31, 2020 1.30
5. Sales, purchases, and expenses other than depreciation occurred evenly throughout the year. The ending inventories were purchased when the exchange rate was $1.33.
6. Aldo acquired its plant and equipment prior to its acquisition by Walton, when the exchange rate was $1.10.
Required
a. Prepare a schedule calculating the translation gain or loss for 2020.
b. Prepare Aldo's translated trial balance at December 31, 2020.
c. Prepare Aldo's translated balance sheet at December 31, 2020.

Quizplus · Accepted Answer

The Answer of The December 31, 2020 trial balance of Aldo, a British subsidiary of Walton Corporation, appears below, expressed in pounds. The pound sterling is Aldo's functional currency.
  Additional information:
1. The balance in the cumulative translation adjustment account at December 31, 2019 was $3,400 (credit).
2. The dollar balance of translated retained earnings at December 31, 2019 was $1,200.
3. When Aldo was acquired by Walton, the exchange rate was $1.20/£. No capital stock changes have occurred since then.
 4. Exchange rates ($/£) were as follows:
January 1, 2020 $1.40
Average for 2020 1.34
December 31, 2020 1.30
5. Sales, purchases, and expenses other than depreciation occurred evenly throughout the year. The ending inventories were purchased when the exchange rate was $1.33.
6. Aldo acquired its plant and equipment prior to its acquisition by Walton, when the exchange rate was $1.10.
Required
a. Prepare a schedule calculating the translation gain or loss for 2020.
b. Prepare Aldo's translated trial balance at December 31, 2020.
c. Prepare Aldo's translated balance sheet at December 31, 2020.

The December 31, 2020 Trial Balance of Aldo, a British