On January 1, 20X1, Popular Creek Corporation organized RoadTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 74,000. RoadTimes December 31, 20X1, trial balance in SFr is as follows:

	Debit		Credit
Cash	SFr	7,200
Accounts Receivable (net)		24,500
Receivable from Popular Creek		6,700
Inventory		28,500
Plant & Equipment		108,000
Accumulated Depreciation			SFr	10,100
Accounts Payable				13,300
Bonds Payable				53,500
Common Stock				74,000
Sales				153,800
Cost of Goods Sold		70,500
Depreciation Expense		10,100
Operating Expense		32,000
Dividends Paid		17,200
Total	SFr	304,700	SFr	304,700

Additional Information
1.	The receivable from Popular Creek is denominated in Swiss francs. Popular Creeks books show a $5,700 payable to RoadTime.
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 years 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:

	SFr		$
January 1	1	=	0.73
March 1	1	=	0.74
November 1	1	=	0.77
December 31	1	=	0.80
20X1 average	1	=	0.75

6.	The Swiss franc is the functional currency.

Required:

a.

Prepare a proof of the translation adjustment.

POPULAR CREEK CORPORATION AND SUBSIDIARY
Proof of Translation Adjustment
Year Ended December 31, 20X1
	U.S Dollars
Net assets at beginning of year
Adjustment for changes in net asset position during year:
Net income for year
Dividends paid
Net assets translated at:
Rates during year
Rates at end of year
Change in other comprehensive income translation adjustment during year net increase
Accumulated other comprehensive income translation adjustment January 1
Change in other comprehensive income translation adjustment December 31

b.	Where is the translation adjustment reported on Popular Creeks consolidated financial statements and its foreign subsidiary? (Select all that apply.)