Financial Statement Translation The Overseas Company reported a cumulative translation adjustment gain of $357,000 on its balance sheet at the end of last year. You have been eagerly awaiting the balance sheet for this year because you know that the dollar has strengthened against most world currencies this year (each dollar buys more units of a foreign currency). You expect an even larger positive cumulative translation adjustment in the balance sheet at the end of this year. However, when the financial statements arrive, you are very disappointed to find that there is a $217,000 cumulative translation adjustment loss reported on the balance sheet.

a. What is the total amount of the cumulative translation loss for this year alone?

b. What might explain the negative cumulative translation adjustment in the balance sheet when the dollar had strengthened during the year?

c. Prepare an example to show what might have led to a negative cumulative translation adjustment in the current year after reporting a positive cumulative translation adjustment the year before.