Question
BABA Corporation, a U.S. Company, formed a subsidiary with a new company in France on January 1, 2020, by investing 400,000 Euro in exchange for
BABA Corporation, a U.S. Company, formed a subsidiary with a new company in France on January 1, 2020, by investing 400,000 Euro in exchange for all of the subsidiarys common stock. On July 1, 2020, the subsidiary purchased land for 100,000 Euro and a building for 300,000 Euro. The building is being depreciated over a 40-year life by the straight-line method. The inventory is valued at historical cost. The Euro is the subsidiarys functional currency and its reporting currency. Exchange rates for the Euro on various dates were: January 1, 2020 1 Euro = $1.51 July 1, 2020 1 Euro = $1.56 December 31, 2020 1 Euro = $1.53 2020average rate 1 Euro = $1.52 The subsidiarys adjusted trial balance shows the following balances: Cash 100,000 Accounts receivable 60,000 Inventory 80,000 Land 100,000 Building 300,000 Accumulated depreciation 3,750 Accounts payable 84,000 Notes Payable 16,750 Common stock 400,000 Retained earnings 0 Sales revenue 443,000 Cost of goods sold 213,750 Depreciation expense 3,750 Other expenses 90,000 Instruction: 1- Translated the previous balances (round to the nearest dollar) 2- Calculate the Cumulative Translation-Adjustment
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