On January $1,20$X$1,$ Popular Creek Corporation organized SunTime Company as a subsidlary in Switzeriand with an initial Investment cost of Swiss francs $($SFr$)60,000.$ Suntime's December $31,20$X$1,$ trial balance in SFr is as follows:

$\backslash$table$[[,$Debit,Credit$],[\backslash$table$[[$Cash$],[$Accounts Receivable $($net$)]],$SFr $7,000,],[\backslash$table$[[$Accounts Receivable $($net$)],[$Recelvable frnm Ponular frnak$]],20,000,],[\backslash$table$[[$Recelvable from Popular Creek$],[$Inventory$]],5,000,],[$Plant and Equipment,$\backslash$table$[[25,000],[100,000]],],[$Accunulated Depreciation,,SFr $10,000],[\backslash$table$[[$Accounts Payable$],[$Bonds Pavahile$]],,12,000],[\backslash$table$[[$Conas Payab te$],[$Conmon Stnck$]],,50,000],[$Sales$,,)],[$Cost of Goods Sold,$70,000,],[$Depreciation Expense,$10,000,],[$Operating Expense,$30,000,],[$Dividends Paid,$15,000,],[$Total$,$SFr $282,000,$SFr $282,000]]$

Additional Information

The recelvable from Popular Creek is denominated in Swiss francs. Popular Creek's books show a $$4,000$ payable to SunTime.

Purchases of Imventory goods are made evenly during the year. Items in the ending inventory were purchased November $1.$

Equipment is depreclated by the straight$-$line method with a $10-$year life and no residual value. A full year's depreclatlon is taken in the year of acquisition. The equipment was acquired on March $1.$

The dividends were declared and paid on November $1.$

Exchange rates were as follows:

January $1$

March $1$

November $1$

December $31$

$201$ averageThe Swiss franc is the functional currency

Required:

a$.$ Prepare a proof of the translation acjustment.

b$.$ Where is the translation adjustment reported on Populer Creek's consolidated financial statements and its foreign subsidlary?

Complete this question by entering your answers in the tabs below.

Required $A$

Prepare a proof of the translation adjustment.

$\backslash$table$[[$POPULAR CREEK CORPORATION AND SUBSIDLARY,$],[$Proof of Tranalation Adjustment,$],[$Year Ended December $31,20$X$1,],[$Net assets at beginning of year,U$.$S Dollars$],[$Adjustment for changes in net asset position during year:,$],[$Net income for year,$],[$Dividends paid,$],[$Net assets branslated at$,],[$Rates during year,$],[$Rates at end of year,$],[$Change in other comprehensive income translation adjustment during year net increase,$]]$