Question

Solo Co. Ltd. located in Mexico City is a wholly owned subsidiary of Partner Inc., a U.S. company. At the beginning of the year, Solo’s condensed balance sheet was reported in Mexican pesos (MXP) as follows:

Assets	3,490,000	Liabilities	2,900,000
		Stockholders’ Equity	590,000

During the year, the company earned income of MXP270,000 and on November 1 declared dividends of MXP125,000. The Mexican peso is the functional currency. Relevant exchange rates between the peso and the U.S. dollar follow:

January 1 (beginning of year)	$	0.0870
Average for year		0.0900
November 1		0.0915
December 31 (end of year)		0.0930

Required:
a. Prepare a proof of the translation adjustment, assuming that the beginning credit balance of the accumulated other comprehensive income—translation adjustment account was $3,260. (Amounts to be deducted should be indicated with a minus sign.)

SOLO CO. LTD. Proof of Translation Adjustment Year Ended December 31 Translation MXP Rate $ Net assets at beginning of year 590,000 $0.0870 51,330 Adjustment for changes in net assets position during year: Net income for year 270,000 $0.0900 24,300 Dividends (125,000) $0.0915 (11,438) Net assets translated at: Rates during year ???? Rates at end of year 735,000 $0.0930 68,355 Change in other comprehensive income-translation adjustment during year (net increase) 68,355 Accumulated other comprehensive income-translation adjustment, 1/1 (credit) 3,260 Accumulated other comprehensive income-translation adjustment, 12/31 (credit) 71,615

P.S. I just need one number for Rates during Year in the table, where I put question mark

Answer 1

Net assets at beginning of year	590,000	$0.0870	$51,330
Adjustment for changes in net assets position during year:
Net income for year	270,000	$0.0900	$24,300
Dividends	-$125,000	$0.0915	-$11,438
Net assets translated at:
Rates during year			$64,193
($51,330 + $24,300 - $11,438)