Florence Enterprises,a Subsidiary of Verona Company Based in New York,reported

question 51

Multiple Choice

Florence Enterprises,a subsidiary of Verona Company based in New York,reported the following information at the end of its first year of operations (all in euros) : assets--1,320,000; expenses--340,000; liabilities--880,000; capital stock--80,000,revenues--400,000.Relevant exchange rates are as follows:

As a result of the translation process,what amount is recorded on the financial statements as the translation adjustment?

• A)$25,200 debit adjustment
• B)$34,800 debit adjustment
• C)$34,800 credit adjustment
• D)$25,200 credit adjustment

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Definitions:

Book Value

The value of an asset as it appears on a balance sheet, calculated by subtracting any associated depreciation or amortization from its original cost.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded for an asset since it was put into service, reducing its book value on the balance sheet.

Machinery

Equipment or devices that perform specific tasks, often used in production and manufacturing processes.

Cash

A form of currency that includes coins and paper notes, used as a medium of exchange for goods and services.