Shames Company is located in London, England. The local currency
is the British pound (£). On January 1, 20X8, Pit Company purchased
an 70 percent interest in Shames for $403,000, which resulted in an
excess of cost-over-book value of $80,000 due solely to a trademark
having a remaining life of 10 years. Pit uses the equity method to
account for its investment.
Shames’s December 31, 20X8, trial balance has been translated into
U.S. dollars, requiring a translation adjustment debit of...