Solo Company Limited, located in Mexico City, is a wholly owned subsidiary of Partner Incorporated, a U.S. company. At the beginning of the year, Solo's condensed balance sheet was reported in Mexican pesos (MXP) as follows: Assets 3,425,000 Liabilities Stockholders' Equity January 1 (beginning of year) Average for year November 1 December 31 (end of year) During the year, the company earned income of MXP260,000 and on November 1 declared dividends of MXP165,000. The Mexican peso is the functional currency. Relevant exchange rates between the peso and the U.S. dollar follow 2,830,000 595,000 $ 0.0870 0.0000 8.0915 0.0930 Required: a. Prepare a proof of the translation adjustment, assuming that the beginning credit balance of the Accumulated Other Comprehensive Income-Translation Adjustment account was $3,240. b. Did the US dollar strengthen or weaken against the Mexican peso during the year?

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Solo Company Limited, located in Mexico City, is a wholly owned subsidiary of Partner Incorporated, a U.S. company. At the beginning
of the year, Solo's condensed balance sheet was reported in Mexican pesos (MXP) as follows:
Assets
3,425,000
January 1 (beginning of year)
Average for year
During the year, the company earned income of MXP260,000 and on November 1 declared dividends of MXP165,000. The Mexican
peso is the functional currency. Relevant exchange rates between the peso and the U.S. dollar follow
November 1
December 31 (end of year)
Liabilities
Stockholders' Equity
$ 0.0870
0.0900
0.0915
0.0930
Required:
a. Prepare a proof of the translation adjustment, assuming that the beginning credit balance of the Accumulated Other
Comprehensive Income-Translation Adjustment account was $3,240
b. Did the US dollar strengthen or weaken against the Mexican peso during the year?
Complete this question by entering your answers in the tabs below.
Dividends
Not assets translated at
2,830,000
595,000
Required A Required B
Prepare a proof of the translation adjustment, assuming that the beginning credit balance of the accumulated other comprehensive income-
translation adjustment account was $3,240.
Note: Amounts to be deducted should be indicated with a minus sign.
Rates during your
Rates at end of your
Net assets at beginning of year
Adjustment for changes in net assets position during year
Net income for year
SOLO COMPANY LIMITED
Proof of Translation Adjustment
Year Ended December 31
Translation
MXP
Rate
Transcribed Image Text:Solo Company Limited, located in Mexico City, is a wholly owned subsidiary of Partner Incorporated, a U.S. company. At the beginning of the year, Solo's condensed balance sheet was reported in Mexican pesos (MXP) as follows: Assets 3,425,000 January 1 (beginning of year) Average for year During the year, the company earned income of MXP260,000 and on November 1 declared dividends of MXP165,000. The Mexican peso is the functional currency. Relevant exchange rates between the peso and the U.S. dollar follow November 1 December 31 (end of year) Liabilities Stockholders' Equity $ 0.0870 0.0900 0.0915 0.0930 Required: a. Prepare a proof of the translation adjustment, assuming that the beginning credit balance of the Accumulated Other Comprehensive Income-Translation Adjustment account was $3,240 b. Did the US dollar strengthen or weaken against the Mexican peso during the year? Complete this question by entering your answers in the tabs below. Dividends Not assets translated at 2,830,000 595,000 Required A Required B Prepare a proof of the translation adjustment, assuming that the beginning credit balance of the accumulated other comprehensive income- translation adjustment account was $3,240. Note: Amounts to be deducted should be indicated with a minus sign. Rates during your Rates at end of your Net assets at beginning of year Adjustment for changes in net assets position during year Net income for year SOLO COMPANY LIMITED Proof of Translation Adjustment Year Ended December 31 Translation MXP Rate
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