On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 78,000. SunTime's December 31, 20X1, trial balance in SFr is as follows: Debit SFr 8,300 24,500 6,000 26,000 109,000 Credit Cash Accounts Receivable (net) Receivable from Popular Creek Inventory Plant & Equipment Accumulated Depreciation Accounts Payable Bonds Payable Common Stock SFr 10,400 13,300 53,000 78,000 153,300 Sales 74,000 10,400 32,000 17,800 SFr 308,000 Cost of Goods Sold Depreciation Expense Operating Expense Dividends Paid SFr 308,000 Total Additional Information 1. The receivable from Popular Creek is denominated in Swiss francs. Popular Creek's books show a $5,000 payable to SunTime. 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: SFr $ January 1 March 1 1 0.73 1 0.74 1 0.77 1 0.80 November 1 December 31 20X1 average 1 .75 6. The Swiss franc is the functional currency Required: a. Prepare a proof of the translation adjustment. Answer is not complete. POPULAR CREEK CORPORATION AND SUBSIDIARY Proof of Translation Adjustment Year Ended December 31, 20X1 U.S Dollars 56,940 Net assets at beginning of year Adjustment for changes in net asset position during year Net income for year Dividends paid 13,706 Net assets translated at: Rates during year 43,234 Rates at end of year Change in other comprehensive income translation adjustment during year net increase Accumulated other comprehensive income translation adjustment January 1 (43,234) Change in other comprehensive income translation adjustment December 31 $ (43,234)