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A U.S. company acquired a Turkish subsidiary at the beginning of the current year. The subsidiary's trial balances for January 1 and December 31 are
A U.S. company acquired a Turkish subsidiary at the beginning of the current year. The subsidiary's trial balances for January 1 and December 31 are presented below in Turkish lira January 1 Dr (Cr) 40,000 400,000 (175,000) (115,000) December 31 Dr (Cr) 20,000 435,000 (170,000) Cash, receivables Plant & equipment, net Liabilities Capital stock Retained earnings, January 1 Dividends Sales revenue Operating expenses Tota (115,000 (150,000) 150,000) 15,000 (800,000) 0 New plant & equipment of t100,000 was acquired during the year. Operating expenses include65,000 of depreciation on plant & equipment, of which 10,000 is related to plant & equipment purchased during the year. Exchange rates (US$/ are as follows: January 1 Average for year Plant & equipment acquired Dividends declared December 31 $0.24 0.25 0.26 0.27 0.30 Assume that the subsidiary's functional currency is the Turkish lira. What is the translation gain or loss for the year? a) $15,800 gain b) $17,200 gain c) $14,600 loss d) $13,150 loss
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