Darron Co: Amount of the translation adjustment for 2011
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Darron Co. was formed on January 1, 2011 as a wholly owned foreign subsidiary of a U.S. corporation. Darron's functional currency was the stickle (§). The following transactions and events occurred during 2011:
Jan. 1 Darron issued common stock for §1,000,000.
June 30 Darron paid dividends of §20,000.
Dec. 31 Darron reported net income of §80,000 for the year
Exchange rates for 2011 were:
Jan 1 $1 = §.48
June 30 $1 = §.46
Dec. 31 $1 = §.42
Weighted average rate for the year $1 = §.44
1. What was the amount of the translation adjustment for 2011?
A. $293,479 increase in relative value of net assets.
B. $302,137 increase in relative value of net assets.
C. $300,160 increase in relative value of net assets.
D. $187,418 increase in relative value of net assets.
E. $270,800 increase in relative value of net assets.
Answer is B but please show computations.
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The solution finds an amount of the translation adjustment for 2011 for Darron Co.
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