Translation Adjustment and Comprehensive Income Dundee Company owns 100 percent o...

Translation Adjustment and Comprehensive Income

Dundee Company owns 100 percent of a subsidiary located in Ireland. The parent company uses the Euro as the subsidiary’s functional currency. At the beginning of the year, the debit balance in the Accumulated Other Comprehensive Income—Translation Adjustment account, which was the only item in accumulated other comprehensive income, was $80,000. The subsidiary’s translated trial balance at the end of the year is as follows:

Required

a. Prepare the subsidiary’s income statement, ending in net income, for the year.

b. Prepare the subsidiary’s statement of comprehensive income for the year.

c. Prepare a year-end balance sheet for the subsidiary.

d. ASC 220 allows for alternative operating statement displays of the other comprehensive income items. Discuss the major differences between the one-statement format of the income statement and comprehensive income versus the two-statement format of the income statement with a separate statement of comprehensive income.