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Translation of financial statements Assume that your company owns a subsidiary operating in Canada. The subsidiary maintains its books in the Canadian Dollar (CAD) as

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Translation of financial statements Assume that your company owns a subsidiary operating in Canada. The subsidiary maintains its books in the Canadian Dollar (CAD) as its functional currency. Following are the subsidiary's financial statements (in CAD) for the most recent year: The relevant exchange rates ($:CAD) are as follows: BOY rate $0.70 EOY rate $0.76 Avg. rate $0.73 PPE purchase date rate $0.74 LTD borrowing date rate $0.74 Dividend rate $0.75 Historical rate (common stock and APIC) $0.60 For both parts a. and b. below, use a negative sign with answers to indicate a reduction. b. Compute the ending Cumulative Translation Adjustment directly, assuming a BOY balance of $(37,237). Round all answers to the nearest dollar. Direct computation of translation adjustment: BOY net assets x (EOY - BOY exchange rates) - $ Net income x (EOY - Average exchange rate) Dividends x (EOY - Dividend exchange rate) BOY cumulative translation adjustment EOY cumulative translation adjustment $

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