Translation of financial statements Assume that your company owns a subsidiary operating in France. The subsidiary conducts most of its business activities in the European Economic Union and maintains its books in the Euro as its functional currency. Following are the subsidiarys financial statements (in ) for the most recent year:

Income Statement:			Balance Sheet:			Statement of Cash Flows:
Sales	1,200,000		Assets			Net Income	168,000
Cost of Goods Sold	(720,000)		Cash	341,520		Change in accounts receivable	(46,400)
Gross profit	480,000		Accounts receivable	278,400		Change in inventories	(59,600)
Operating expenses	(312,000)		Inventory	357,600		Change in current liabilities	33,920
Net income	168,000		Property, plant, and			Net cash from operating activities	95,920
			equipment (PPE), net	661,440
			Total assets	1,638,960
Statement of retained earnings:						Change in PPE, net	(61,440)
BOY ret. earnings	630,000		Liabilities and stockholders equity			Net cash from investing activities	(61,440)
Net income	168,000		Curr. liabilities	203,520
Dividends	(16,800)		L-T liabilities	474,240		Change in long-term debt	79,040
EOY ret. earnings	781,200		Common stock	80,000		Dividends	(16,800)
			APIC	100,000		Net cash from financing activities	62,240
			Ret. earnings	781,200
			Total liabilities and equity	1,638,960		Net change in cash	96,720
						Beginning cash	244,800
						Ending cash	341,520

The relevant exchange rates ($:1) are as follows:

BOY rate	$1.09
EOY rate	$1.14
Avg. rate	$1.11
PPE purchase date rate	$1.12
LTD borrowing date rate	$1.12
Dividend rate	$1.13
Historical rate (common stock and APIC)	$0.90

below, use a negative sign with answers to indicate a reduction.

Compute the ending Cumulative Translation Adjustment directly, assuming a BOY balance of $228,801.

Direct computation of translation adjustment:
AnswerBOY cumulative translation adjustmentBOY net assets x (EOY - BOY exchange rates)BOY net assets x BOY exchange rateNet income x (EOY - Average exchange rate)Net income x average exchange rateDividends x (EOY - Dividend exchange rate)Dividends x dividend exchange rateEOY net assets x EOY exchange rateEOY cumulative translation adjustmentTranslation adjustment for the year	$Answer
Net income x (EOY - Average exchange rate)	Answer
AnswerBOY cumulative translation adjustmentBOY net assets x (EOY - BOY exchange rates)BOY net assets x BOY exchange rateNet income x (EOY - Average exchange rate)Net income x average exchange rateDividends x (EOY - Dividend exchange rate)Dividends x dividend exchange rateEOY net assets x EOY exchange rateEOY cumulative translation adjustmentTranslation adjustment for the year	Answer
	Answer
AnswerBOY cumulative translation adjustmentBOY net assets x (EOY - BOY exchange rates)BOY net assets x BOY exchange rateNet income x (EOY - Average exchange rate)Net income x average exchange rateDividends x (EOY - Dividend exchange rate)Dividends x dividend exchange rateEOY net assets x EOY exchange rateEOY cumulative translation adjustmentTranslation adjustment for the year	Answer
EOY cumulative translation adjustment	$Answer