Sinkal Co. was formed on January 1, 2018 as a wholly owned foreign subsidiary of a...

Sinkal Co. was formed on January 1, 2018 as a wholly owned foreign subsidiary of a U.S. corporation. Sinkal's functional currency was the stickle (§). The following transactions and events occurred during 2018: Jan. 1 Sinkal issued common stock for §1,000,000. June 30 Sinkal paid dividends of §20,000. Dec. 31 Sinkal reported net income of §80,000 for the year. Exchange rates for 2018 were: Jan.1 § 1 = $ 0.42 June 30 § 1 = $ 0.46 Dec.31 § 1 = $ 0.48 Weighted average rate for the year § 1 = $ 0.44 What was the amount of the translation adjustment for 2018? Multiple Choice $52,000 negative translation adjustment. $62,800 negative translation adjustment. $62,800 positive translation adjustment. $440,000 negative translation adjustment. $26,000 positive translation adjustment.

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Sinkal Co. was formed on January 1, 2018 as a wholly owned foreign subsidiary of a U.S. corporation. Sinkal's functional currency was the stickle (§). The following transactions and events occurred during 2018: Jan. 1 Sinkal issued common stock for §1,000,000. June 30 Sinkal paid dividends of §20,000. Dec. 31 Sinkal reported net income of §80,000 for the year. Exchange rates for 2018 were: Jan.1 § 1 = $ 0.42 June 30 § 1 = $ 0.46 Dec.31 § 1 = $ 0.48 Weighted average rate for the year § 1 = $ 0.44 What was the amount of the translation adjustment for 2018? Multiple Choice $52,000 negative translation adjustment. $62,800 negative translation adjustment. $62,800 positive translation adjustment. $440,000 negative translation adjustment. $26,000 positive translation adjustment.

Date	Pariculars	Amount in FC	Exchange rate	Amount in ($)	Restatement Exchange rate	Amount in ($)	Translation reserve
Jan-01	Common stck	$1,000,000	0.42	$420,000	0.48	$480,000	$60,000
Jun-30	Dividends	$20,000	0.46	$9,200	0.48	$9,600	$400
Dec-31	Net income	$80,000	0.48	$38,400	0.48	$38,400	$0
							$60,400
							Increase in relative value of net assets. Ans) next nearest option positive62,800 is correct

Ans) Option (c) $62,800 positive translation adjustment

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ekkarill92 answered 1 hour ago

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