Foreign currency translation—Comprehensive income A U.S.-based parent company acquired a European Union–based subsidiary many years ago. The subsidiary is in the service sector, and earns revenues and incurs expenses evenly throughout the year. The following preclosing trial balance includes the subsidiary’s original Euros-based accounting information for the year ended December 31, 2022, immediately prior to closing the company’s nominal accounts into the corresponding balance sheet accounts. It also includes the information converted into $US based on the indicated exchange rates: $US Conversion Weighted- Debits (Credits) Euros Current Average Historical Monetary Assets € 120,000.00 $144,000 $147,600 $156,000 Nonmonetary assets 480,000 576,000 590,400 624,000 Monetary Liabilities (60,000) (72,000) (73,800) (78,000) Nonmonetary liabilities (300,000) (360,000) (369,000) (390,000) Contributed capital (144,000) (172,800) (177,120) (201,600) Retained earnings (January 1, 2022) (60,000) (72,000) (73,800) (84,000) Revenues (540,000) (648,000) (664,200) n/a Expenses 480,000 576,000 590,400 n/a Dividends 24,000 28,800 29,520 30,000 Total € - The items in the current column are multiplied times the spot rate at December 31, 2022. The items in the weighted-average column are multiplied times the rate weighted monthly over the year ending December 31, 2022. The individual items in the historical column are multiplied times the rate in effect at the later of the date the item originated or the acquisition date. When consolidating at December 31, 2021, the balance of retained earnings was $96,000 (i.e., a credit balance). In addition, through December 31, 2021, regardless of whether the subsidiary was translated or remeasured, the sum of all currency conversion gains and losses was an aggregate loss (i.e., a debit) of $60,000. For this question assume the subsidiary’s functional currency is the Euro. For the year ended December 31, 2022, what is the subsidiary’s $US amount of comprehensive income (loss)?Select one: a. $73,800 b. $38,400 c. $80,400 d. $13,800
Foreign currency translation—Comprehensive income
A U.S.-based parent company acquired a European Union–based subsidiary many years ago. The subsidiary is in the service sector, and earns revenues and incurs expenses evenly throughout the year. The following preclosing trial balance includes the subsidiary’s original Euros-based accounting information for the year ended December 31, 2022, immediately prior to closing the company’s nominal accounts into the corresponding balance sheet accounts. It also includes the information converted into $US based on the indicated exchange rates:
| $US Conversion | ||||
|---|---|---|---|---|
| Weighted- | ||||
| Debits (Credits) | Euros | Current | Average | Historical |
| Monetary Assets | € 120,000.00 | $144,000 | $147,600 | $156,000 |
| Nonmonetary assets | 480,000 | 576,000 | 590,400 | 624,000 |
| Monetary Liabilities | (60,000) | (72,000) | (73,800) | (78,000) |
| Nonmonetary liabilities | (300,000) | (360,000) | (369,000) | (390,000) |
| Contributed capital | (144,000) | (172,800) | (177,120) | (201,600) |
| Retained earnings (January 1, 2022) | (60,000) | (72,000) | (73,800) | (84,000) |
| Revenues | (540,000) | (648,000) | (664,200) | n/a |
| Expenses | 480,000 | 576,000 | 590,400 | n/a |
| Dividends | 24,000 | 28,800 | 29,520 | 30,000 |
| Total | € - |
The items in the current column are multiplied times the spot rate at December 31, 2022. The items in the weighted-average column are multiplied times the rate weighted monthly over the year ending December 31, 2022. The individual items in the historical column are multiplied times the rate in effect at the later of the date the item originated or the acquisition date. When consolidating at December 31, 2021, the balance of retained earnings was $96,000 (i.e., a credit balance). In addition, through December 31, 2021, regardless of whether the subsidiary was translated or remeasured, the sum of all currency conversion gains and losses was an aggregate loss (i.e., a debit) of $60,000.
For this question assume the subsidiary’s functional currency is the Euro. For the year ended December 31, 2022, what is the subsidiary’s $US amount of comprehensive income (loss)?Select one:
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