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:

Assets3,410,000Liabilities2,830,000Stockholders' Equity580,000

During the year, the company earned income of MXP270,000 and on November 1 declared dividends of MXP135,000. The Mexican peso is the functional currency. Relevant exchange rates between the peso and the U.S. dollar follow:

January 1 (beginning of year)$0.0870Average for year0.0900November 10.0915December 31 (end of year)0.0930

Required:

a. Prepare a proof of the translation adjustment, assuming that the beginning credit balance of the accumulated other comprehensive incometranslation adjustment account was $3,290.(Amounts to be deducted should be indicated with a minus sign.)

b. Did the U.S. dollar strengthen or weaken against the Mexican peso during the year?

• Weakened
• Strengthened