If Apollo’s functional currency is the FC, which of the following statements holds?

(a) A translation gain of $480,000 is recorded in income.

(b) A translation loss of $480,000 is taken to Foreign Currency Translation Reserve.

(c) A translation gain of $480,000 is taken to Foreign Currency Translation Reserve.

(d) A translation gain of $100,000 is recorded in income On 31 December 20x3, Zeus Ltd, whose functional currency is the dollar ($), incorporated a subsidiary, Apollo (X) Ltd, in country X, whose currency was the FC. Apollo operated a car rental business. The company was incorporated with a paid-up capital of FC 2,000,000. On 31 December 20x3, Apollo purchased a fleet of cars that cost FC 2,000,000. During 20x4, Apollo earned FC 1,000,000 from rental income. Depreciation for the year was FC 200,000. At the end of 20x4, Apollo had a cash balance of FC 1,000,000. Exchange rates are as follows:

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31 December 20x3. 31 December 20x4. Average for 20x4. FC 1 = $0.50 FC 1 = $0.70 FC 1 = $0.80