Sinkal Co. was formed on January 1, 2018 as a wholly owned foreign subsidiary of a U.S. corporation. Sinkal's functional currency was the stickle (§). The following transactions and events occurred during 2018: Jan. 1Sinkal issued common stock for §1,000,000.June 30Sinkal paid dividends of §20,000.Dec. 31Sinkal reported net income of §80,000 for the year.??Exchange rates for 2018 were:? Jan.1§1=$0.42June 30§1=$0.46Dec.31§1=$0.48Weighted average rate for the year§1=$0.44??What was the amount of the translation adjustment for 2018?
A. $26,000 increase in relative value of net assets.
B. $52,000 decrease in relative value of net assets.
C. $60,400 increase in relative value of net assets.
D. $440,000 decrease in relative value of net assets.
E. $60,400 decrease in relative value of net assets.
Answer: E
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