Answered: January 1....... Average for the year.…

Business

Accounting

January 1....... Average for the year. December 31.... $0.25 - 1 rand 0.28 = 1 0.31 = 1 %3D %3D

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter4: Accounting For Retail Operations

Section: Chapter Questions

Problem 4.2MBA: Sales transactions Using transactions listed in P4-2, indicate the effects of each transaction on...

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Question

Yang Corporation starts a foreign subsidiary on January 1 by investing 20,000 rand. Yang owns all of the shares of the subsidiary’s common stock. The foreign subsidiary generates 40,000 rand of net income throughout the year and pays no dividends. The rand is the foreign subsidiary’s functional currency. Currency exchange rates for 1 rand are as follows:
In preparing consolidated financial statements, what translation adjustment will Yang report at the end of the current year?
a. $400 positive (credit).
b. $1,000 positive (credit).
c. $1,400 positive (credit).
d. $2,400 positive (credit).

January 1.......
Average for the year.
December 31....
$0.25 - 1 rand
0.28 = 1
0.31 = 1
%3D
%3D

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