On January 1, 20X1, Popular Creek Corporation organized Road Time Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 60,000. Road Time's December 31, 20X1, Trial balance in SFr is as follows:

	Debit (SFr)	Credit (SFr)
Cash	7000
Accounts Receivable	20000
Receivable from Popular Creek	5000
Inventory	25000
Plant and Equipment	100000
Accumulated Depreciation		10000
Accounts Payable		12000
Bonds Payable		50000
Common Stock		60000
Sales		150000
Cost of goods sold	70000
Depreciation Expense	10000
Operating Expense	30000
Dividend paid	15000
Total	SFr282,000	SFr 282,000

Additional Information:

1. The receivable from Popular Creek is denominated in Swiss francs. Popular Creek's books show a $4,000 payable to Road Time. 2. Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1. 3. Equipment is depreciated by the straight-line method with a 10-year life and no residual value. A full year's depreciation is taken in the year of acquisition. The equipment was acquired on March 1. 4. The dividends were declared and paid on November 1. 5. Exchange rates were as follows:

January 1	1SFr=$.73
March 1	1SFr=$.74
November 1	1SFr=$.77
December 31	1SFr=$.80
20X1 Average	1SFr=$.75

The Swiss franc is the functional currency. Required: (a) Prepare a schedule translating the December 31, 20X1, trial balance from Swiss francs to dollars (8 marks)

(b) Where is the translation adjustment reported on Popular Creek's consolidated financial statements and its foreign subsidiary? (3 marks)