Question
In: Accounting
Solo Co. Ltd. located in Mexico City is a wholly owned subsidiary of Partner Inc., a...
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 | 3,445,000 | Liabilities | 2,860,000 |
| Stockholders’ Equity | 585,000 | ||
During the year, the company earned income of MXP250,000 and on
November 1 declared dividends of MXP135,000. 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 $3,230.
Solutions
Expert Solution
Please find below table useful to compute desired results: -
End results would be as follows: -
ekkarill92 answered 1 year agoRelated Solutions
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