A U.S. corporation began operating a subsidiary in a foreign country on January 1, 2021 by acquiring all of the common stock for 100,000 stickles, the local currency unit. (The 1/1/21 balance sheet therefore consists of two accounts: cash and common stock.)

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Financial statements for 2021 were as follows: Statement of Retained Earnings RE, 1/1/21 Net income Income Statement Sales revenue COGS Gross profit Depreciation Other expenses Net income 500,000 st (200,000) 300,000 (30,000) (100,000) 170,000 st 170,000 (20,000) 150,000 Less: dividends RE, 12/31/11 Balance Sheet as of 12/31/21 Liabilities & Equity A/P Assets 280,000 st 50,000 st 200,000 100,000 150,000 Cash Long-term debt Common stock A/R 50,000 50,000 Inventory Equipment Less: Acc. Dep. Total assets 150,000 Retained earnings (30,000) 120,000 500,000 Total liab & equity 500,000 Other information: The subsidiary purchased equipment for 150,000 stickles on 4/1/21 and is using straight- line depreciation with a 5-year life. Dividends of 20,000 were paid on 12/1/21. Exchange rates are as follows: January 1, 2021 April 1, 2021 December 1, 2021 December 31, 2021 Average for 2021 1 stickle = $2.00 1 stickle = $2.10 1 stickle = $2.15 1 stickle = $2.20 1 stickle = $2.10 Required: (A) Translate the subsidiary's income statement and balance sheet into U.S. dollars using the current rate method. (B) Provide the calculation for the translation adjustment for 2021. (C) Remeasure the subsidiary's income statement and balance sheet into U.S. dollars using the temporal method. (D) Provide the calculation for the remeasurement gain/loss for 2021. Financial statements for 2021 were as follows: Statement of Retained Earnings RE, 1/1/21 Net income Income Statement Sales revenue COGS Gross profit Depreciation Other expenses Net income 500,000 st (200,000) 300,000 (30,000) (100,000) 170,000 st 170,000 (20,000) 150,000 Less: dividends RE, 12/31/11 Balance Sheet as of 12/31/21 Liabilities & Equity A/P Assets 280,000 st 50,000 st 200,000 100,000 150,000 Cash Long-term debt Common stock A/R 50,000 50,000 Inventory Equipment Less: Acc. Dep. Total assets 150,000 Retained earnings (30,000) 120,000 500,000 Total liab & equity 500,000 Other information: The subsidiary purchased equipment for 150,000 stickles on 4/1/21 and is using straight- line depreciation with a 5-year life. Dividends of 20,000 were paid on 12/1/21. Exchange rates are as follows: January 1, 2021 April 1, 2021 December 1, 2021 December 31, 2021 Average for 2021 1 stickle = $2.00 1 stickle = $2.10 1 stickle = $2.15 1 stickle = $2.20 1 stickle = $2.10 Required: (A) Translate the subsidiary's income statement and balance sheet into U.S. dollars using the current rate method. (B) Provide the calculation for the translation adjustment for 2021. (C) Remeasure the subsidiary's income statement and balance sheet into U.S. dollars using the temporal method. (D) Provide the calculation for the remeasurement gain/loss for 2021.

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