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
Explain the mechanism that states use to prevent the double taxation of the income of a corporation doing business in two or more states.

This assessment item may be completed either individually or in groups of two (2) students.  The group mark on both assessment items will be given to both students.  Please ensure

WyseFinance maintains a non-current asset register for recording information for non-current assets for a business. The business is registered for VAT. The following is a purcha

Looking for Income Statement and Balance Sheet for the Better USA, Inc. company for 2010 and 2011 There are two sets of numbers, after each category. The first will represent 2010

r u working on my homework

On January 1, a company issued and sold a $400,000, 7%, 10-year bong payable, and recieved proceeds of $396,000. Interest is payable each June 30 and December 31. The company uses

Inventories constitute a important portion of the current assets ranging from 40 percent to 60 percent for manufacturing companies. The manufacturing companies conduct investments

Brabham Enterprises manufactures tires for the Formula One motor racing circuit. For August 2011, Brabham budgeted to manufacture and sell 3,000 tires at a variable cost of $74

URL services has two divisions. Basic webpages and custom webpages. Ricky Vega, Custom's manager wants to find out why Custom is not profitable. He has prepared the following repor

Broadway Scripts is a service-type enterprise in the entertainment field, and its manager, Joe Numbers, has only a limited knowledge of accounting. Joe prepared the following balan