On January 1, 20X1, Veldon Co., a U.S. corporation with the U.S. dollar as its functional currency, established Malont Co. as a subsidiary. Malont is located in the country of Sorania, and its functional currency is the stickle (§). Malont engaged in the following transactions during 20X1.
|
January 1, 20X1 |
Issued common stock for §500,000 |
|
July 14, 20X1 |
Sold a patent at a gain of §40,000 |
|
October 1, 20X1 |
Paid dividends of §60,000 |
Malont’s operating revenues and expenses for 20X1 were §800,000 and §650,000, respectively. The appropriate exchange rates were as follows.
|
January 1, 20X1 |
§1 = $2.50 |
|
July 14, 20X1 |
§1 = $2.10 |
|
October 1, 20X1 |
§1 = $2.60 |
|
December 31, 20X1 |
§1 = $2.70 |
|
Average for 20X1 |
§1 = $2.40 |
Required:
(A) Calculate Malont’s net assets in stickles as of December 31, 20X1.
(B) Calculate the translation adjustment for Malont, and state whether it is a positive or a negative adjustment (round your answers to the nearest whole dollar).
