Reference no: EM131804393

Question - Darron Co. was formed on January 1, 2011 as a wholly owned foreign subsidiary of a U.S. corporation. Darron's functional currency was the stickle (§). The following transactions and events occurred during 2011:

Jan. 1 Darron issued common stock for §1,000,000.

June 30 Darron paid dividends of §20,000.

Dec. 31 Darron reported net income of §80,000 for the year

Exchange rates for 2011 were:

Jan 1 $1 = §.48

June 30 $1 = §.46

Dec. 31 $1 = §.42

Weighted average rate for the year $1 = §.44

1. What was the amount of the translation adjustment for 2011?

A. $293,479 increase in relative value of net assets.

B. $302,137 increase in relative value of net assets.

C. $300,160 increase in relative value of net assets.

D. $187,418 increase in relative value of net assets.

E. $270,800 increase in relative value of net assets.