3.

On January 1, 20X1, Popular Creek Corporation organized RoadTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 74,000. RoadTimes December 31, 20X1, trial balance in SFr is as follows:

	Debit		Credit
Cash	SFr	8,400
Accounts Receivable (net)		24,000
Receivable from Popular Creek		6,100
Inventory		27,000
Plant & Equipment		108,000
Accumulated Depreciation			SFr	10,700
Accounts Payable				12,300
Bonds Payable				51,500
Common Stock				74,000
Sales				160,000
Cost of Goods Sold		72,500
Depreciation Expense		10,700
Operating Expense		35,000
Dividends Paid		16,800
Total	SFr	308,500	SFr	308,500

Additional Information
1.	The receivable from Popular Creek is denominated in Swiss francs. Popular Creeks books show a $5,100 payable to RoadTime.
2.	Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1.
3.	Equipment is depreciated by the straight-line method with a 10-year life and no residual value. A full years depreciation is taken in the year of acquisition. The equipment was acquired on March 1.
4.	The dividends were declared and paid on November 1.
5.	Exchange rates were as follows:

	SFr		$
January 1	1	=	0.73
March 1	1	=	0.74
November 1	1	=	0.77
December 31	1	=	0.80
20X1 average	1	=	0.75

6.	The Swiss franc is the functional currency.

Required:

a.	Prepare a proof of the translation adjustment. net assets at beginning of year net income for year dividends paid rates at end of year accumulated other comprehensive income translation adjustment January 1

b.	Where is the translation adjustment reported on Popular Creeks consolidated financial statements and its foreign subsidiary? (Select all that apply.) Cash flow statement statment of financial position income statement statement of comprehensive income statement of retained earnings