On January 1, 20X8, Pullman Corporation acquired 75 percent interest in Steamship Company for $300,000. Steamship is a Norwegian company. The recording currency is the Norwegian kroner (NKr). The acquisition resulted in an excess of cost-over-book value of $25,000 due solely to a patent having a remaining life of 5 years. Pullman uses the fully adjusted equity method to account for its investment. Steamship's December 31, 20X8, trial balance has been translated into U.S. dollars, requiring a translation adjustment debit of $8,000. Steamship's net income translated into U.S. dollars is $35,000. It declared and paid an NKr 20,000 dividend on June 1, 20X8. Relevant exchange rates are as follows: January 1, 20X8NKrl=$0.20 June 1, 20X8NKrl=$0.23 December 31, 20X8NKrl=$0.24 Average for
20X8NKrl=$0.22 Assume the kroner is the functional currency.Based on the preceding information, in the journal entry to record the receipt of dividend from Steamship,
A. Investment in Steamship Company will be credited for $4,000.
B. Cash will be debited for $3,600.
C. Investment in Steamship Company will be credited for $3,450.
D. Cash will be debited for $3,300.
Answer: C
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