On January 1, 20X4, Alum Corporation acquired Franco Company, a French subsidiary, by purchasing all the common stock at book value. Franco's trial balances on January 1, 20X4, and December 31, 20X4, expressed in French francs (FF), are as follows:

1. Franco uses FIFO inventory valuation. Purchases were made uniformly during 20X4. Ending inventory for \(20 \mathrm{X} 4\) is comprised of units purchased when the exchange rate was \(\$ .25\).
2. The insurance premium for a two-year policy was paid on October 1, \(20 \times 3\).
3. Plant and equipment were acquired as follows:

4. Plant and equipment are depreciated using the straight-line method and a 10-year life with no residual value. A full month's depreciation is taken in the month of acquisition.
5. The intangible assets are patents acquired on July \(10,20 \mathrm{X} 2\), at a cost of FF 60,000 . The estimated life is five years.
6. The common stock was issued on January \(1,20 \mathrm{X} 1\).
7. Dividends of FF 10,000 were declared and paid on April 7. On October 9, FF 15,000 of dividends were declared and paid.
8. Exchange rates were as follows:

\section*{Required}

a. Prepare a schedule translating the December 31, 20X4, trial balance of Franco Company from francs to dollars.

b. Prepare a schedule calculating the translation adjustment as of the end of \(20 \times 4\). The net assets on January \(1,20 \mathrm{X} 4\), were FF 280,000 .

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January 1, 20X4 December 31, 20X4 Debit Credit Debit Credit Cash Accounts Receivable (net) Inventories FF 62.000 FF 57.700 83.900 82.000 95.000 95,000 Prepaid Insurance 5.600 2,400 Plant and Equipment 250.000 350.000 Accumulated Depreciation FF 67.500 FF 100.000 Intangible Assets 42.000 30.000 Accounts Payable 20.000 24,000