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Rayburn Corporation acquired 100 percent of the common stock of a British company on January 1, 2019, for $128800. Rayburn determined that the Great Britain Pound was the functional currency. On December 31, 2019, the British subsidiary's adjusted trial balance, translated into U.S. dollars, contained $18700 more debits than credits. The British subsidiary reported income of 96400 pounds for 2019 and paid a cash dividend of 40500 pounds on October 25, 2019. Rayburn uses the fully adjusted equity method of accounting for its investment. Exchange rates at various dates during 2019 follow: January 1 1E= 1.21 October 25 1E= 1.24 December 31 1E= 1.27 Average for the year 1E= 1.23 Based on the preceding information, for what amount should Rayburn credit "Other Comprehensive Income- Translation Adjustment"?

Rayburn Corporation acquired 100 percent of the common stock of a British company on January 1, 2019, for $128800. Rayburn determined that the Great Britain Pound was the functional currency. On December 31, 2019, the British subsidiary's adjusted trial balance, translated into U.S. dollars, contained $18700 more debits than credits. The British subsidiary reported income of 96400 pounds for 2019 and paid a cash dividend of 40500 pounds on October 25, 2019. Rayburn uses the fully adjusted equity method of accounting for its investment. Exchange rates at various dates during 2019 follow: January 1 1E= 1.21 October 25 1E= 1.24 December 31 1E= 1.27 Average for the year 1E= 1.23 Based on the preceding information, for what amount should Rayburn credit "Other Comprehensive Income- Translation Adjustment"?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Rayburn Corporation acquired 100 percent of the common stock of a British company on January 1, 2019, for $128800. Rayburn determined that the Great Britain Pound was the functional currency. On December 31, 2019, the British subsidiary's adjusted trial balance, translated into U.S. dollars, contained $18700 more debits than credits. The British subsidiary reported income of 96400 pounds for 2019 and paid a cash dividend of 40500 pounds on October 25, 2019. Rayburn uses the fully adjusted equity method of accounting for its investment. Exchange rates at various dates during 2019 follow: January 1 1E= 1.21 October 25 1E= 1.24 December 31 1E= 1.27 Average for the year 1£= 1.23 Based on the preceding information, for what amount should Rayburn credit "Other Comprehensive Income - Translation Adjustment"?
Transcribed Image Text:Rayburn Corporation acquired 100 percent of the common stock of a British company on January 1, 2019, for $128800. Rayburn determined that the Great Britain Pound was the functional currency. On December 31, 2019, the British subsidiary's adjusted trial balance, translated into U.S. dollars, contained $18700 more debits than credits. The British subsidiary reported income of 96400 pounds for 2019 and paid a cash dividend of 40500 pounds on October 25, 2019. Rayburn uses the fully adjusted equity method of accounting for its investment. Exchange rates at various dates during 2019 follow: January 1 1E= 1.21 October 25 1E= 1.24 December 31 1E= 1.27 Average for the year 1£= 1.23 Based on the preceding information, for what amount should Rayburn credit "Other Comprehensive Income - Translation Adjustment"?
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