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31 October, 16:51

Seattle, Inc. owns an 80 percent interest in a Portuguese subsidiary. For 20X8, Seattle reported income from operations of $2.0 million. The Portuguese company's income from operations, after foreign currency translation, was $1.1 million. The foreign currency translation adjustment was $120,000 (credit). Consolidated net income and consolidated comprehensive income for the year are:

Consolidated Net Income Consolidated Comprehensive Income

(A) $ 3,100,000 $ 3,196,000

(B) $ 2,980,000 $ 3,076,000

(C) $ 3,004,000 $ 3,100,000

(D) $ 2,880,000 $ 2,976,000

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  1. 31 October, 19:20
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    (D) $ 2,880,000 $ 2,976,000

    Explanation:

    Consoidated net income

    Seattle Inc $2,000,000

    Portugese sub $880,000

    (1.1*80%)

    Consoidated net income $2,880,000

    Comprehensive income

    Net income $2,880,000

    Other comphrensive income / (loss)

    Foreign currency translation adjustment $96,000

    (120000*80%)

    combined comprehensive income $2,976,000

    Therefore, The Consolidated net income and consolidated comprehensive income for the year are $2,880,000 amd $2,976,000.
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