Solo Co. Ltd. located in Mexico City is a wholly owned
subsidiary of Partner Inc., a U.S. company. At the beginning of the
year, Solo’s condensed balance sheet was reported in Mexican pesos
(MXP) as follows:
Assets | 3,490,000 | Liabilities | 2,900,000 |
Stockholders’ Equity | 590,000 | ||
During the year, the company earned income of MXP270,000 and on
November 1 declared dividends of MXP125,000. The Mexican peso is
the functional currency. Relevant exchange rates between the peso
and the U.S. dollar follow:
January 1 (beginning of year) | $ | 0.0870 | |
Average for year | 0.0900 | ||
November 1 | 0.0915 | ||
December 31 (end of year) | 0.0930 | ||
Required:
a. Prepare a proof of the translation adjustment, assuming that the
beginning credit balance of the accumulated other comprehensive
income—translation adjustment account was $3,260. (Amounts
to be deducted should be indicated with a minus sign.)
|
P.S. I just need one number for Rates during Year in the table, where I put question mark
Net assets at beginning of year | 590,000 | $0.0870 | $51,330 |
Adjustment for changes in net assets position during year: | |||
Net income for year | 270,000 | $0.0900 | $24,300 |
Dividends | -$125,000 | $0.0915 | -$11,438 |
Net assets translated at: | |||
Rates during year | $64,193 | ||
($51,330 + $24,300 - $11,438) |
Solo Co. Ltd. located in Mexico City is a wholly owned subsidiary of Partner Inc., a U.S. company. At the beginning of t...
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