A Domestic Company's 100%-Owned Foreign Subsidiary Located in Great Britain

Essay

A domestic company's 100%-owned foreign subsidiary located in Great Britain had stockholders' equity of 500,000 pounds at 1/1/06. During 2006, the subsidiary (whose functional currency is the pound) reported net income of 300,000 pounds. On 11/30/06, the subsidiary declared and paid a dividend of 100,000 pounds.
Direct exchange rate information follows:
Required:
Calculate the 2006 translation adjustment.