Determine the amount of translation adjustment, Financial Accounting

Alliance Corporation (an Australian company) invests 1,000,000 marks in a foreign subsidiary on January 1, Year 1. The subsidiary commences operations on that date, and generates net income of 200,000 marks during its first year of operations. No dividends are sent to the parent this year. A relevant exchange rate between Alliance’s reporting currency (A$) and the mark is as follows:

January 1, Year 1………….. A$0.15

Average, Year 1………………….0.17

December 31, 1997……………0.21

Required:

Determine the amount of translation adjustment that Alliance will report on its December 31, Year 1, balance sheet.

          Exchange   
        Marks Rate A$
Net Assets, 1/1/Y1      1,000,000           0.15    150,000
Increase in Net assets:        
    Net Income, Year 1        200,000           0.17      34,000
Net Assets, 31/12/Y1    1,200,000      184,000
             
Net Assets, 31/12/Y1 at        
the current exchange rate    1,200,000           0.21    252,000
Translation adjustment           -68,000
             

 

Posted Date: 8/9/2012 8:18:44 AM | Location : United States







Related Discussions:- Determine the amount of translation adjustment, Assignment Help, Ask Question on Determine the amount of translation adjustment, Get Answer, Expert's Help, Determine the amount of translation adjustment Discussions

Write discussion on Determine the amount of translation adjustment
Your posts are moderated
Related Questions
Since 1968, Dracula Limited has traded in Doncaster, South Yorkshire as a manufacturer of fancy-dress and theatrical costumes. It produces a wide range of general theatrical costum

Puts - A put is an option to sell a number of shares of stock at a stated price within a definite period. Gain or loss on a put is short or long term depending on holding period of

This is a research case.  You must complete this assignment INDIVIDUALLY.  This means no help from other students.  You may consult Dr. Eldridge while you are working on this case.

AsIDENTIFY THE MAIN PROVISIONS OF THE PARTNERSHIP ACT k question #Minimum 100 words accepted#

Q. What is Inheritance in Gross income? Inheritance - As distinguished from a BEQUEST or devise, an inheritance is property attained through laws of descent and distribution fr

Q. What is Permanent Negotiating Machinery? Two Federation of Union All Indian Railway men's federation (AIRF) & National Federation of Indian Railway (NFIR) men have been reco

PURPOSE The purpose of this assignment is to provide learners opportunity to discuss the significance of the significance of the accounting principles and the qualitative chara

Admission of a new partner When a new partner joins the firm/partnership, the new partner will enjoy the benefits arising as a result of goodwill created by the old existing pa

A huge number of financial ratios are in utilized. They complete a broad variety of functions and objectives. Managers estimate performance and investors match their expectations,

Financial ratios have been categorized in a variety of manners. You may determine the subsequent broad bases having been utilized in current literature:  Primacy Criterion: Th