Four Seasons Inc. starts a subsidiary in Switzerland. The functional currency of the subsidiary is the swiss franc. On January 1, the subsidiary's balance sheet revealed the following balances:

Cash..........................SF20,000Notes payable............SF28,000

Inventory......................25,000Common stock...............15,000

Land............................5,000Retained Earnings ............ 10,000

Equipment .....................3,000

Total53,00053,000

The following transactions are the only transaction that took place during the year. On April 1, the subsidiary purchases inventory for 25,000 francs for cash and sells this inventory on August 1 for 35,000 francs on account. May 1, the subsidiary sells the land for 7,000 cash. On October 1, the company incurred an operating expense in the amount of 5,000 francs, which was immediately paid in cash. Currency exchanges rates for 1 franc are as follows:

January 1$0.88 = 1 franc

April 10.896 = 1

May 10.91 = 1

August 10.93 = 1

October 10.94 = 1

December 310.96 = 1

In preparing consolidated financial statements, what translation adjustment will Four Seasons report at the end of the current year?

Multiple Choice

• $ 2,300 negative translation adjustment
• $2,400 negative translation adjustment
• $ 2,300 positive translation adjustment
• $2,300 remeasurement gain