Livingston Company is a wholly owned subsidiary of Rose Corporation. Livingston operates in a foreign country with financial statements recorded in goghs (GH), the company’s functional currency.
Financial statements for the year of 2011 are as follows:
Income Statement
For Year Ending December 31, 2011
Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GH 270,000
Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . (155,000)
Gross profit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115,000
Less: Operating expenses . . . . . . . . . . . . . . . . . . . . . . . (54,000)
Gain on sale of equipment . . . . . . . . . . . . . . . . . . . . . . 10,000
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GH 71,000
Statement of Retained Earnings
For Year Ending December 31, 2011
Retained earnings, 1/1/11 . . . . . . . . . . . . . . . . . . . . . . . GH 216,000
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,000
Less: Dividends paid . . . . . . . . . . . . . . . . . . . . . . . . . . . (26,000)
Retained earnings, 12/31/11 . . . . . . . . . . . . . . . . . . . GH 261,000
Balance Sheet
December 31, 2011
Assets
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GH 44,000
Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116,000
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,000
Fixed assets (net) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 339,000
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GH 557,000
Liabilities and Equities
Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . GH 176,000
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000
Retained earnings, 12/31/11 . . . . . . . . . . . . . . . . . . . . . 261,000
Total liabilities and equities . . . . . . . . . . . . . . . . . . . . GH 557,000

Additional Information
• The common stock was issued in 2004 when the exchange rate was $1.00 _ 0.48 GH; fixed assets were acquired in 2005 when the rate was $1.00 _ 0.50 GH.
• As of January 1, 2011, the Retained Earnings balance was translated as $395,000.
• The currency exchange rates for $1 for the current year follow:
January 1, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . 0.60 GH
April 1, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.62
September 1, 2011 . . . . . . . . . . . . . . . . . . . . . . . .0.58
December 31, 2011 . . . . . . . . . . . . . . . . . . . . . . . 0.65
Weighted average rate for 2011 . . . . . . . . . . . . . 0.63
• Inventory was acquired evenly throughout the year.
• The December 31, 2010, balance sheet reported a translation adjustment with a $85,000 debit balance.
• Dividends were paid on April 1, 2011, and a piece of equipment was sold on September 1, 2011.
Translate the foreign currency statements into the parent’s reporting currency, the U.S. dollar.