Tampa Education Center Corporation was created as a whollysubsidiary of Saint Leo Corporation (a U.S.-based company) on
January 1, Year 1. On that date, Saint Leo Corporation invested
$42,000 in Tampa Education Center Corporation’s capital stock
Given the exchange rate on that date of $0.84 per cruzeiro, the
investment of $42,000 was converted into 50,000 cruzeiros (Cz
Other than the capital investment on January 1, there were no
transactions involving stockholders’ equity in Year 1. Tampa
Education Center Corporation’s cruzeiro-denominated financia
statements for Year 2 are as follows:
The cruzeiro is the primary currency that Tampa Education Center Corporation u
day operations. The cruzeiro has steadily fallen in value against the dollar since S
Corporation made the investment in Tampa Education Center Corporation on Jan
Relevant U.S. dollar ($) exchange rates for the cruzeiro for Years 1 and 2 are as f
Required: Use a new sheet to complete each requirement below.
1-Translate Tampa Education Center Corporation’s Year 2 financial statements in
dollars.
2- Compute the translation adjustment for Year 1 and for Year 2 and reconcile th
amounts to the cumulative translation adjustment reported on the translated ba
sheet at December 31, Year 2.
s created as a wholly owned
S.-based company) on
Corporation invested
oration’s capital stock.
.84 per cruzeiro, the initial
50,000 cruzeiros (Cz).
ry 1, there were no
y in Year 1. Tampa
denominated financial
ation Center Corporation uses in its day-toue against the dollar since Saint Leo
Center Corporation on January 1, Year 1.
o for Years 1 and 2 are as follows:
ment below.
ar 2 financial statements into U.S.
for Year 2 and reconcile these
ported on the translated balance
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