Gale Co. was formed on January 1, 2021 as a wholly owned foreign subsidiary of a U.S. corporation. Gale’s functional currency was the stickle (§). The following transactions and events occurred during 2021: Jan. 1 Gale issued common stock for §2,000,000. June 30 Gale paid dividends of §50,000. Dec. 31 Gale reported net income of §120,000 for the year. Exchange rates for 2021 were: Jan. 1 $ 1 = § 0.50 June 30 $ 1 = § 0.47 Dec. 31 $ 1 = § 0.44 Weighted average rate for the year $ 1 = § 0.46 What was the amount of the translation adjustment for 2021?

Gale Co. was formed on January 1, 2021 as a wholly owned foreign subsidiary of a U.S. corporation. Gale’s functional currency was the stickle (§). The following transactions and events occurred during 2021: Jan. 1 Gale issued common stock for §2,000,000. June 30 Gale paid dividends of §50,000. Dec. 31 Gale reported net income of §120,000 for the year. Exchange rates for 2021 were: Jan. 1 $ 1 = § 0.50 June 30 $ 1 = § 0.47 Dec. 31 $ 1 = § 0.44 Weighted average rate for the year $ 1 = § 0.46 What was the amount of the translation adjustment for 2021?

SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter9: Taxation Of International Transactions

Section: Chapter Questions

Problem 28P

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