Kingsfield establishes a subsidiary operation in a foreign country on January 1, 2020. The country’s currency is the rial (R). To start this business, Kingsfield invests 10,000 rials. Of this amount, it spends 3,000 rials immediately to acquire equipment. Later, on April 1, 2020, it also purchases land. All subsidiary operational activities occur at an even rate throughout the year. Kingsfield uses the U.S. dollar  as its reporting currency. The U.S. dollar ($) exchange rates for the rial for 2020 follow:

January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.71

April 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.59

June 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.66

Weighted average . . . . . . . . . . . . . . . . . . . . . . . 1.64

December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.62

As of December 31, 2020, the subsidiary reports the following trial balance:

a. Assume that the subsidiary’s functional currency is the rial (R). Prepare a trial balance for it in U.S. dollars so that 2020 consolidated financial statements can be prepared.

b. Assume that the subsidiary’s functional currency is the U.S. dollar. Prepare a trial balance for it in U.S. dollars so that 2020 consolidated financial statements can be prepared.

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Debits Credits Cash R 8,000 Accounts receivable 9,000 Equipment Accumulated depreciation 3,000 R 600 Land 5,000 Accounts payable Notes payable (due 2028) Common stock . 3,000 5,000 10,000 Dividends declared (6/1/20) 4,000 Sales... 25,000 Salary expense Depreciation expense Miscellaneous expenses 5,000 600 9,000 Totals R 43,600 R 43,600