On January 1, 20X1, Popular Creek Corporation organized SunTime Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 62,000. SunTimes December 31, 20X1, trial balance in SFr is as follows:

	Debit				Credit
Cash	SFr	9,000
Accounts Receivable (net)		24,000
Receivable from Popular Creek		6,500
Inventory		29,500
Plant & Equipment		106,000
Accumulated Depreciation					SFr	10,900
Accounts Payable						12,500
Bonds Payable						51,000
Common Stock						62,000
Sales						172,700
Cost of Goods Sold		74,500
Depreciation Expense		10,900
Operating Expense		33,500
Dividends Paid		15,200
Total	SFr	309,100			SFr	309,100

Additional Information

The receivable from Popular Creek is denominated in Swiss francs. Popular Creek's books show a $5,500 payable to SunTime.

Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1.

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.

The dividends were declared and paid on November 1.

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

The Swiss franc is the functional currency.

Required: a. Prepare a proof of the translation adjustment.