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 $ 1 = § 0.50 June 30 $ 1 = § 0.47 Dec. 31 $ 1 = § 0.44 Weighted average rate for the year $ 1 = § 0.46 What was the amount of the translation adjustment for 2021?
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 $ 1 = § 0.50 June 30 $ 1 = § 0.47 Dec. 31 $ 1 = § 0.44 Weighted average rate for the year $ 1 = § 0.46 What was the amount of the translation adjustment for 2021?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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 | $ | 1 | = | § | 0.50 |
| June 30 | $ | 1 | = | § | 0.47 |
| Dec. 31 | $ | 1 | = | § | 0.44 |
| Weighted average rate for the year | $ | 1 | = | § | 0.46 |
What was the amount of the translation adjustment for 2021?
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
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.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education