Question
On January 1, 2021, George Co., a U.S. corporation with the U.S. dollar as its functional currency, established Fedrick Co. as a subsidiary. Fedrick is
On January 1, 2021, George Co., a U.S. corporation with the U.S. dollar as its functional currency, established Fedrick Co. as a subsidiary. Fedrick is located in Special Country, and its functional currency is the LCU. Fedrick is engaged in the following transactions during 2021:
January 1, 2021 | Issued common stock for 500,000 LCU |
July 25, 2021 | Sold a patent at a gain of 50,000 LCU |
October 1, 2021 | Paid dividends of 60,000 LCU |
Fedrick Co.s operating revenues and expenses for 2021 were 900,000 LCU and 700,000 LCU, respectively. The appropriate exchange rates were:
January 1, 2021: 1 LCU = $2.45
July 25, 2021: 1 LCU = $2.15
October 1, 2021: 1 LCU = $2.54
December 31, 2021: 1 LCU = $2.65
Average for 2021: 1 LCU = $2.41
Required:
Calculate the translation adjustment for Fedrick Co. (Round your answers to the nearest whole dollar.)
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