On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $153,000. Ship's net assets on the date of acquisition were 710,000 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: Credits NK Debits 155,000 206,000 299,000 616,000 NK Cash Accounts Receivable (net) Inventory Property, Plant & Equipment Accumulated Depreciation Accounts Payable Notes Payable Common Stock Retained Earnings Sales Cost of Goods Sold Operating Expenses Depreciation Expense Dividends Paid Total 165, 100 99,000 201,000 450,000 260,000 723,900 415,500 111,000 54,000 42,500 NKr1,899,000 NKr1,899,000 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 NK1420,000 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 $250,000 for 20X5, and its total stockholders' equity on January 1, 20X5, was $3,500,000. Pirate declared $120,000 of dividends during 20X5. 6. Exchange rates were as follows: Required: Prepare a schedule providing a proof of the translation adjustment. (Amounts to be deducted should Answer is complete but not entirely correct. Norwegian Kroner 710,000 Exchange Rate U.S. Dollars NKT 0.18 127,800 Net assets at beginning of year Adjustments for changes in net assets position during 20X5: Net income Less: Dividends paid Net assets translated at: 250,000 $ 42,500 X 0.20 50,000 0.198,075 Rates during year NKr 1,002,500 0.21 185,875 210,525 $ 24,650 Rates at end of year Change in other comprehensive income - translation adjustment during year Accumulated other comprehensive income - translation adjustment - January 1 Accumulated other comprehensive income - translation adjustment - December 31 (credit) $ 24,650