On January 1st Mammoth Company established Juno Inc., a wholly-owned, self-sustaining British subsidiary with assets valued at 50 million pounds. The pound is the functional currency for Juno.

The exchange rate at the time the subsidiary was established was .80 pounds per \($1\). On January 2nd, after the subsidiary was established, the exchange rate changed to .82 pounds per \($1\).

Required

1. What is the amount of total assets that Juno Inc. will show on its balance sheet in U.S. dollars on January Ist (before the exchange rate change)?

2. What is the amount of the cumulative foreign currency translation adjustment that Mammoth Company will report on its balance sheet after the exchange rate change?