A US-Owned Foreign Subsidiary Has the Following Beginning and Ending Stockholders

question 24

Essay

A U.S.-owned foreign subsidiary has the following beginning and ending stockholders' equity for 20X1:
The change in common stock resulted from a sale of stock to the parent firm on May 15. The change in retained earnings resulted from a July 1 dividend of 10,000 FC and net income for 20X1. Various exchange rates were as follows:
$\begin{array}{lc}\text { Date } & 1 \mathrm{FC} \text { equal to } \\\text { January } 1,20 \mathrm{X} 1 & \$ 1.10 \\\text { May } 15,20 \mathrm{X} 1 & \$ 1.12 \\\text { July } 1,20 \mathrm{X} 1 & \$ 1.13 \\\text { December } 31,20 \mathrm{X} 1 & \$ 1.15 \\\text { 20X1 average } & \$ 1.125\end{array}$ Required:
Compute the 20X1 translation adjustment for the foreign subsidiary.

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Definitions:

Bank Service Charge

Fees charged by banks for the use of their services, such as account maintenance fees, non-sufficient funds (NSF) fees, and transaction fees.

Adjusting Journal Entries

Entries made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.

NSF Check

A check that cannot be processed due to insufficient funds in the account of the drawer, commonly known as a bounced check.

Bank Service Charge

Fees charged by a bank for the maintenance of account services and other banking transactions.