Question
Q11.On January 1, 2024, Larnach Company, a U.S. corporation with the U.S. dollar as its functional currency, established Castro Company as a subsidiary. Castro is
Q11.On January 1, 2024, Larnach Company, a U.S. corporation with the U.S. dollar as its functional currency, established Castro Company as a subsidiary. Castro is located in the country of Oliva, and its functional currency is the stickle (). Castro engaged in the following transactions during 2024:
| January 1, 2024 | Issued common stock for 500,000 |
| July 14, 2024 | Sold a patent at a gain of 40,000 |
| October 1, 2024 | Paid dividends of 60,000 |
Castro's operating revenues and expenses for 2024 were 800,000 and 650,000, respectively. The appropriate exchange rates were:
| January 1, 2024 | 1 = $ 2.5 |
| July 14, 2024 | 1 = $ 2.1 |
| October 1, 2024 | 1 = $ 2.6 |
| December 31, 2024 | 1 = $ 2.7 |
| Average for 2024 | 1 = $ 2.4 |
Required:
Calculate the translation adjustment for Castro.
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Using Financial Accounting Information The Alternative to Debits and Credits
Authors: Gary A. Porter, Curtis L. Norton
7th Edition
978-0-538-4527, 0-538-45274-9, 978-1133161646
