An American Company, on January 1, 2020 purchased a 100% interest in a subdivision located in Italy. Sales were earned and operating expenses were incurred evenly during the year. Exchange rates for the euro at various dates are:

1/1/2020		1.12
12/31/2020		1.25
Average for 2020		1.16
12/10/2020, dividends declared & paid		1.24
2/25/2012		1.38
9/3/2018		1.30

Notes: Read carefully and follow strictly so that Bb can grade you correctly!
1. Use comma in numbers, one thousand is 1,000, not 1000. Round to the nearest dollar: 1,000.45 should be 1,000, and 1,000.55 should be 1,001, no decimal points. No $ sign.
2. Use parenthesis ( ) for expenses, accumulated depreciation, dividends, and G/L or adjustments only!

Required: Translate the year-end financial statements of the foreign subsidiary using the temporal method (Round numbers to the nearest dollar).

Translation of Financial Statements to U.S. Dollars

For Year Ended December 31, 2020

Balance Sheets
	Euro	Exch. Rate	U.S. Dollars
Cash	125,000
Accounts receivable	212,000
P&E (net) (purchased 9/3/2018)	222,000
Land (purchased 9/3/2018)	275,000
Total Assets	834,000
Accounts payable	210,000
Long-term N/P (issued 9/3/2018)	111,000
Common stock (issued 2/25/2012)	130,000
Retained earnings	383,000
Total Liabilities & Equity	834,000
Income Statement
Revenues	420,000
Depreciation	(55,000)
Operating exp. excld. Depreciation	(253,000)
Translation G/L
Net income	112,000
Statement of Retained Earnings
Beginning retained earnings	323,000
Net income	112,000
	435,000
Dividends declared and paid	(52,000)
Ending retained earnings	383,000

Answer rating: 100% (QA)

For the Year Ended December 31 2020 Balance Sheet Euro Exchange Rate US Dollars Cash 125000 125 1562... View the full answer