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On January 1, 20X1, Himalaya Corporation organized Alps Company as a subsidiary in Switzerland with an initial investment cost of Swiss francs (SFr) 120,000. Alps's December 31, 20X1, trial balance in SFr is as follows:

Debit (SFr)

Credit(SFr)

Cash

14000

Accounts Receivable

40000

Receivable from Himalaya

10000

Inventory

50000

Plant and Equipment

200000

Accumulated Depreciation

20000

Accounts Payable

24000

Bonds Payable

100000

Common Stock

120000

Sales

300000

Cost of goods sold

140000

Depreciation Expense

20000

Operating Expense

60000

Dividend paid

30000

Total

SFr564,000

SFr 564,000

Additional Information

1.The receivable from Himalaya is denominated in Swiss francs. Himalaya's books show a $8,000 payable to Alps.

2.Purchases of inventory goods are made evenly during the year. Items in the ending inventory were purchased November 1.

3.Equipment is depreciated by the straight-line method with a 10-year life and no residual value. A full year's depreciation is taken in the year of acquisition. The equipment was acquired on March 1.

4.The dividends were declared and paid on November 1.

5.Exchange rates were as follows:

January 1

1SFr=$.73

March 1

1SFr=$.74

November 1

1SFr=$.77

December 31

1SFr=$.80

20X1 Average

1SFr=$.75

6.The Swiss franc is the functional currency.

(a) Prepare a schedule translating the December 31, 20X1, trial balance from Swiss francs to dollars.

(b) Prepare a proof of the translation adjustment computed

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