On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $165,600. Ship's net assets on the date of acquisition were 780,000 kroner (NKr). On January 1, 20X5, the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship's property, plant, and equipment exceeded its book value by $18,000. The remaining useful life of Ship's equipment at January 1, 20X5, was 10 years. The remainder of the differential was attributable to a patent having an estimated useful life of 5 years. Ship's trial balance on December 31, 20X5, in kroner, follows:

DebitsCreditsCashNKr162,000Accounts Receivable (net)213,000Inventory286,000Property, Plant & Equipment605,000Accumulated DepreciationNKr155,100Accounts Payable95,000Notes Payable206,000Common Stock440,000Retained Earnings340,000Sales665,900Cost of Goods Sold423,500Operating Expenses120,000Depreciation Expense51,000Dividends Paid41,500TotalNKr1,902,000NKr1,902,000

Additional Information:

1. Ship uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20X4, and ending inventory was acquired on December 15, 20X5. Purchases of NKr420,000 were made evenly throughout 20X5.
2. Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation.
3. Ship's sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5.
4. The dividends were declared and paid on July 1, 20X5.
5. Pirate's income from its own operations was $258,000 for 20X5, and its total stockholders' equity on January 1, 20X5, was $3,500,000. Pirate declared $140,000 of dividends during 20X5.
6. Exchange rates were as follows:

Nkr$July 1, 20X31=0.15December 30, 20X41=0.18January 1, 20X51=0.18July 1, 20X51=0.19December 15, 20X51=0.205December 31, 20X51=0.21Average for 20X51=0.20

Required:

Prepare a schedule providing a proof of the translation adjustment.(Amounts to be deducted should be indicated with a minus sign.)