Doner Company Inc. established a foreign subsidiary on January 1, Year 1. The subsidiary’s financial statements in foreign currency (FC) for the year ended December 31, Year 1, appear as follows: 

Revenues and expenses occur evenly throughout the year. Revenues and other expenses are realized in cash during the year. General price indexes (GPI) and parent currency (PC) per FC exchange rates for Year 1 are as follows: 

Required: 

a. Translate the foreign subsidiary’s Year 1 foreign currency (FC) financial statements into parent currency (PC) using IFRS. 

b. Remeasure the foreign subsidiary’s Year 1 foreign currency (FC) financial statements into parent currency (PC) using U.S. GAAP.

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January 1, Year Balance December Sheets 31, Year 1 Cash and FC receivables 20,000 FC 85,000 Property and equipment, net 50,000 45,000 FC Total .... 70,000 FC130,000 FC Payables ... 15,000 FC 15,000 Contributed capital 55,000 55,000 Retained earnings 60,000 FC Total .... 70,000 FC130,000 Income Statement Year 1 FC Revenues ... 100,000 Depreciation (5,000) Other expenses (35,000) FC Net income. 60,000