Bezos Company (a U.S. company) established a subsidiary, Marfa Ltd., in Ruritania on January 1, Year 1. On that date, Bezos invested $1,800,000 in Marfas capital stock, and Marfa immediately converted the $1,800,000 in cash received from Bezos into 3,000,000 ducats, at the exchange rate of $0.60 per ducat. This was the only transaction involving Marfas stockholders equity in Year 1.

The ducat is the primary currency that Marfa uses in its day-to-day operations. Relevant U.S. dollar exchange rates for the ducat for Years 1 and 2 are as follows:

January 1, Year 1	$0.60/ducat
Average for Year 1	0.64
December 31, Year 1/January 1, Year 2	0.70
Average for Year 2	0.72
December 1, Year 2	0.69
December 31, Year 2	0.68

Marfas ducat-denominated statement of retained earnings for Year 2 is as follows:

Statement of Retained Earnings, Year 2
	ducats
Retained earnings, 1/1/Y2	570,000
Net income	370,500
Dividends (paid on 12/1/Y2)	(92,635)
Retained earnings, 12/31/y2	847,865

Required:

Compute the translation adjustments for Year 1 and Year 2, following the format on page 296 of the course textbook, and calculate the cumulative translation adjustment. Clearly indicate whether the translation adjustments are positive or negative.