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Solo Co. Ltd. located in Mexico City is a wholly owned subsidiary of Partner Inc., a U.S. company. At the beginning of the year, Solo's
Solo Co. Ltd. located in Mexico City is a wholly owned subsidiary of Partner Inc., a U.S. company. At the beginning of the year, Solo's condensed balance sheet was reported in Mexican pesos (MXP) as follows: 2,850,000 Stockholders' Equity 595,000 Assets 3,445,000 Liabilities During the year, the company earned income of MXP260,000 and on November 1 declared dividends of MXP120,000. The Mexican peso is the functional currency. Relevant exchange rates between the peso and the U.S. dollar follow: January 1 (beginning of year) $0.8878 Average for year November 1 December 31 (end of year) .930 0.0900 0.0915 Required a. Prepare a proof of the translation adjustment, assuming that the beginning credit balance of the accumulated other comprehensive income-translation adjustment account was $3,230. (Amounts to be deducted should be indiceted with e minus sign.)
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