Reference no: EM132779613

Hollywood Corporation had a realized foreign exchange loss of $25,000 for the year ended December 31, 2020, and must also determine whether the following items will require year-end adjustment.

• Hollywood had an $8,000 translation loss resulting from the translation of the accounts of its wholly owned foreign subsidiary for the year ended December 31, 2020. The functional currency is the foreign local currency.
• Hollywood had an account payable to an unrelated foreign supplier payable in the supplier's local currency. The U.S. dollar equivalent of the payable was $60,000 on the October 31, 2020, invoice date, and it was $63,000 on December 31, 2019. The invoice is payable on January 30, 2021.

Problem 1: In Hollywood's 2020 consolidated income statement, what amount should be included as foreign currency translation loss?