Gale Co. was formed on January 1, 2021 as a wholly owned foreign subsidiary of a U.S. corporation. Gale's functional currency was the stickle (§). The following transactions and events occurred during 2021: Jan. 1 Gale issued common stock for $2,000,000. June 30 Gale paid dividends of $50,000. Dec. 31 Gale reported net income of $120,000 for the year.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
100%
Gale Co. was formed on January 1, 2021 as a wholly owned foreign subsidiary of a U.S. corporation. Gale's functional currency was the stickle (§). The following transactions and events occurred during
2021:
Jan. 1 Gale issued common stock for $2,000,000.
June 30 Gale paid dividends of $50,000.
Dec. 31 Gale reported net income of $120,000 for the year.
Exchange rates for 2021 were:
Jan. 1
June 30
Dec. 31
Weighted average rate for the
year
What was the amount of the translation adjustment for 2021?
Multiple Choice
$1$0.50
$1$0.47
$1$0.44
$1$0.46
O
$121,500 increase in relative value of net assets.
$121,500 decrease in relative value of net assets.
$62,000 decrease in relative value of net assets.
$62,000 increase in relative value of net assets.
$58,500 increase in relative value of net assets.
Transcribed Image Text:Gale Co. was formed on January 1, 2021 as a wholly owned foreign subsidiary of a U.S. corporation. Gale's functional currency was the stickle (§). The following transactions and events occurred during 2021: Jan. 1 Gale issued common stock for $2,000,000. June 30 Gale paid dividends of $50,000. Dec. 31 Gale reported net income of $120,000 for the year. Exchange rates for 2021 were: Jan. 1 June 30 Dec. 31 Weighted average rate for the year What was the amount of the translation adjustment for 2021? Multiple Choice $1$0.50 $1$0.47 $1$0.44 $1$0.46 O $121,500 increase in relative value of net assets. $121,500 decrease in relative value of net assets. $62,000 decrease in relative value of net assets. $62,000 increase in relative value of net assets. $58,500 increase in relative value of net assets.
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 1 images

Blurred answer
Knowledge Booster
Depletions and Amortizations
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education