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Ginvold Co. began operating a subsidiary in a foreign country on January 1, 2013 by acquiring all of the common stock for $50.000 Stickles,
Ginvold Co. began operating a subsidiary in a foreign country on January 1, 2013 by acquiring all of the common stock for $50.000 Stickles, the local currency. This subsidiary immediately borrowed $120,000 on a five-year note with ten percent Interest payable annually beginning on January 1, 2014. A building was then purchased for $170,000 on January 1, 2013. This property had a ten-year anticipated life and no salvage value and was to be depreciated uning the straight-line method. The building was immediately rented for three years to a group of local doctors for $6,000 per month. By year-end, payments totaling $60,000 had been received. On October 1, 55,000 were paid for a repair made on that date and it was the only transaction of this kind for the year. A cash dividend of $6.000 was transferred back to Ginvold on December 31, 2013. The functional currency for the subsidiary was the Stickle (8) Currency exchange rates were as follows January 1, 2013: 51-$2.40 October 1, 2013: 51-$2.22 Average. 2013: 51-$2.28 December 31, 2013: $1-$2.16 Compute the translation adjustment for the year 2013. O $26.60 $16.860 loss O $16.860 pain O $36.860 gain O $26.860 pain
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