any (a U.S.-based company) has a subsidiary in Canada that began operations at the start of 2020 with assets of 142,000 Canadian dollars (CAD) and liabilities of CAD 74,000. During this initial year of operation, the subsidiary reported a profit of CAD 36,000. It distributed two dividends, each for CAD 6,000 with one dividend declared o
Christina Company (a U.S.-based company) has a subsidiary in Canada that began operations at the start of 2020 with assets of 142,000 Canadian dollars (CAD) and liabilities of CAD 74,000. During this initial year of operation, the subsidiary reported a profit of CAD 36,000. It distributed two dividends, each for CAD 6,000 with one dividend declared on March 1 and the other on October 1. Applicable U.S. dollar ($) exchange rates for 1 Canadian dollar follow:
| January 1, 2020 (start of business) | $0.79 |
| March 1, 2020 | 0.77 |
| Weighted average rate for 2020 | 0.76 |
| October 1, 2020 | 0.75 |
| December 31, 2020 | 0.74 |
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Compute the net translation adjustment the company will report in accumulated other comprehensive income for the year 2020 under this second set of circumstances.
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Assume that the Canadian dollar is this subsidiary’s functional currency. What translation adjustment would the company report for the year 2020?
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