Dover Company Owns 90% of the Capital Stock of a Foreign

question 49

Multiple Choice

Dover Company owns 90% of the capital stock of a foreign subsidiary located in Italy. Dover's accountant has just translated the accounts of the foreign subsidiary and determined that a debit translation adjustment of $80,000 exists. If Dover uses the fully adjusted equity method for its investment, what entry should Dover record in order to recognize the translation adjustment?

• A) Option A
• B) Option B
• C) Option C
• D) Option D

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Definitions:

Enforceable Security Interest

A legal claim or lien on collateral that gives a creditor the right to take possession of the property if the debtor defaults on obligations.

Continuation Statement

A legal document filed to extend the duration of a UCC financing statement, maintaining the priority of the secured interest in the collateral.

Financing Statement

A document filed to give public notice of a security interest in personal property, used to perfect a lender's interest in the property as collateral for a loan.

Default

Failure to fulfill a financial obligation or agreement, especially failure to make payments on a loan.