Alliance Corporation an Australian company invests 1 000 000 m
Alliance Corporation (an Australian company) invests 1,000,000 marks in a foreign subsidiary on January 1, Year 1. The subsidiary commences operations on that date, and generates net income of 200,000 marks during its first year of operations. No dividends are sent to the parent this year. A relevant exchange rate between Alliance’s reporting currency (A$) and the mark is as follows:
January 1, Year 1........ A$0.15
Average, Year 1........ 0.17
December 31, 1997...... 0.21

Required:
Determine the amount of translation adjustment that Alliance will report on its December 31, Year 1, balance sheet.

Membership TRY NOW
  • Access to 800,000+ Textbook Solutions
  • Ask any question from 24/7 available
    Tutors
  • Live Video Consultation with Tutors
  • 50,000+ Answers by Tutors
OR
Relevant Tutors available to help