Gale Co Was Formed on January 1, 2021 as a Wholly

question 21

Multiple Choice

Gale Co. was formed on January 1, 2021 as a wholly owned foreign subsidiary of a U.S. corporation. Gale's functional currency was the stickle (§) . The following transactions and events occurred during 2021: Exchange rates for 2021 were: What was the amount of the translation adjustment for 2021?

• A) $121,500 increase in relative value of net assets.
• B) $121,500 decrease in relative value of net assets.
• C) $62,000 decrease in relative value of net assets.
• D) $62,000 increase in relative value of net assets.
• E) $58,500 increase in relative value of net assets.

---

Definitions:

Purchase Order

A commercial document issued by a buyer to a seller, indicating types, quantities, and agreed prices for products or services.

Decentralized

A system or organization where decision-making authority is distributed among various levels rather than being concentrated at a single point.

Capitalized

The process of recording an expenditure as an asset on the balance sheet, rather than as an expense on the income statement, allowing for depreciation over time.

Amortized

The process of gradually reducing a debt through regular payments over a period.