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. 1Gale issued common stock for §2,000,000.June 30Gale paid dividends of §50,000.Dec. 31Gale reported net income of §120,000 for the year. Exchange rates for 2021 were: Jan. 1$1=§0.50June 30$1=§0.47Dec. 31$1=§0.44Weighted average rate for the year$1=§0.46 What was the amount of the translation adjustment for 2021?

From accounting perspective, translation refers to a procedure to prepare a foreign subsidiary's…

Answered: Gale Co. was formed on January 1, 2021…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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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?

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