On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 67,000. SunTimes December 31, 20X1, trial balance in SFr is as follows:

	Debit				Credit
Cash	SFr	8,800
Accounts Receivable (net)		25,000
Receivable from Popular Creek		5,600
Inventory		27,000
Plant & Equipment		107,000
Accumulated Depreciation					SFr	11,800
Accounts Payable						13,100
Bonds Payable						54,500
Common Stock						67,000
Sales						163,600
Cost of Goods Sold		74,500
Depreciation Expense		11,800
Operating Expense		33,500
Dividends Paid		16,800
Total	SFr	310,000			SFr	310,000

Additional Information

1. The receivable from Popular Creek is denominated in Swiss francs. Popular Creek's books show a $4,600 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 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.

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

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 0 0 $ GA