Abercrombe Co., a U.S.firm, formed a German company in 2017 by purchasing the common stock of the newly formed Dolce Inc.The functional currency of Dolce is the euro.During their first three years, Dolce experienced the following activity in retained earnings:
?
?
$$\begin{array} { l l r }
2017 & \text { Net loss } & 100,000 \text { euros } \
2018 & \text { Net income } & 200,000 \text { euros } \
\text { January } 1,2019 & \text { Dividend } & 50,000 \text { euros } \
2019 & \text { Net income } & 75,000 \text { euros }
\end{array}$$ The following exchange rates could be relevant:
?
$$\begin{array} { l r }
\text { Date } & \text { 1 euro equal to } \
\text { December 31,2016 } & \$ 0.20 \
\text { December 31,2017 } & \$ 0.22 \
\text { Average 2017 } & \$ 0.215 \
\text { January 1, 2019 } & \$ 0.245 \
\text { Average 2018 } & \$ 0.24 \
\text { December 31, 2019 } & \$ 0.26 \
\text { Average 2019 } & \$ 0.25
\end{array}$$ Required:
?
What is the translated December 31, 2019, balance of the retained earnings for Dolce?

Question

Abercrombe Co., a U.S.firm, formed a German company in 2017 by purchasing the common stock of the newly formed Dolce Inc.The functional currency of Dolce is the euro.During their first three years, Dolce experienced the following activity in retained earnings:
?
?
 $$\begin{array} { l l r } 
2017 & \text { Net loss } & 100,000 \text { euros } \
2018 & \text { Net income } & 200,000 \text { euros } \
\text { January } 1,2019 & \text { Dividend } & 50,000 \text { euros } \
2019 & \text { Net income } & 75,000 \text { euros }
\end{array}$$ The following exchange rates could be relevant:
?
 $$\begin{array} { l r } 
\text { Date } & \text { 1 euro equal to } \
\text { December 31,2016 } & \$ 0.20 \
\text { December 31,2017 } & \$ 0.22 \
\text { Average 2017 } & \$ 0.215 \
\text { January 1, 2019 } & \$ 0.245 \
\text { Average 2018 } & \$ 0.24 \
\text { December 31, 2019 } & \$ 0.26 \
\text { Average 2019 } & \$ 0.25
\end{array}$$ Required:
?
What is the translated December 31, 2019, balance of the retained earnings for Dolce?

Quizplus · Accepted Answer

The Answer of Abercrombe Co., a U.S.firm, formed a German company in 2017 by purchasing the common stock of the newly formed Dolce Inc.The functional currency of Dolce is the euro.During their first three years, Dolce experienced the following activity in retained earnings:
?
?
 $$\begin{array} { l l r } 
2017 & \text { Net loss } & 100,000 \text { euros } \
2018 & \text { Net income } & 200,000 \text { euros } \
\text { January } 1,2019 & \text { Dividend } & 50,000 \text { euros } \
2019 & \text { Net income } & 75,000 \text { euros }
\end{array}$$ The following exchange rates could be relevant:
?
 $$\begin{array} { l r } 
\text { Date } & \text { 1 euro equal to } \
\text { December 31,2016 } & \$ 0.20 \
\text { December 31,2017 } & \$ 0.22 \
\text { Average 2017 } & \$ 0.215 \
\text { January 1, 2019 } & \$ 0.245 \
\text { Average 2018 } & \$ 0.24 \
\text { December 31, 2019 } & \$ 0.26 \
\text { Average 2019 } & \$ 0.25
\end{array}$$ Required:
?
What is the translated December 31, 2019, balance of the retained earnings for Dolce?

Abercrombe Co The Following Exchange Rates Could Be Relevant: