case Study for chapter 8 LA Corporation, Inc. established a subsidiary in a foreign country on January 1, 2015 by investing 10,000,000 pounds when the exchange rate was $1.10/pound. LA Corporation negotiated a bank loan of ,000,000 pounds on January 5, 2015, and purchased plant and equipment in the amount of 12,000,000 pounds January 8, 2015. Plant and equipment s depreciated on the straight-line basis over a 10 year useful life. The first purchase of inventory, 1,500,000 pounds, was made on January 10, 2015. Additional inventory of 14,000,000 pounds was acquired at various times throughout the year at an average exchange rate of $1.15/pound. Inventory on hand at year-end was acquired when the exchange rate was $1.18/pound. The FIFO method is used to determine cost of goods sold. Additional exchange rates for the pound during Year 2015 are as follows: January 1-15, 2015 $ 1.10 Average for 2015 $ 1.11 December 31, 2015 $ 1.21 he foreign subsidiary?s income statement for 2015 and balance sheet at December 31, 2015 can be und on the excel spread sheets attached. As the controller for LA Corporation, Inc, you have determined that the pound is the subsidiary?s functional currency. Required: a. Using the spreadsheet provided translate the foreign subsidiary?s financial statements into US Dollars at December 31, 2015, in accordance with US GMP. Insert a row in the spreadsheet after retained earnings and before total liabilities and stockholders? equity for the cumulative translation adjustment Calculate the translation adjustment separately to verify the amount obtained as a balancing figure in the translation worksheet. b. Using the spreadsheet provided remeasure the foreign subsidiary?'s financial statements into US Dollars at December 31, 2015, assuming that the US Dollar is the subsidiary?s functional currency. Insert a row in the spreadsheet after depreciation expense and before income before taxes for the remeasurement gain (loss). Calculate the remeasurement gain(loss) separately to support your answer. c. Explain why the translation adjustments,/remeasurement gain(Ioss) calculated in a and b are either positive or negative. You will not receive full credit if you ignore this requirement case Study for chapter 8 LA Corporation, Inc. established a subsidiary in a foreign country on January 1, 2015 by investing 10,000,000 pounds when the exchange rate was $1.10/pound. LA Corporation negotiated a bank loan of ,000,000 pounds on January 5, 2015, and purchased plant and equipment in the amount of 12,000,000 pounds January 8, 2015. Plant and equipment s depreciated on the straight-line basis over a 10 year useful life. The first purchase of inventory, 1,500,000 pounds, was made on January 10, 2015. Additional inventory of 14,000,000 pounds was acquired at various times throughout the year at an average exchange rate of $1.15/pound. Inventory on hand at year-end was acquired when the exchange rate was $1.18/pound. The FIFO method is used to determine cost of goods sold. Additional exchange rates for the pound during Year 2015 are as follows: January 1-15, 2015 $ 1.10 Average for 2015 $ 1.11 December 31, 2015 $ 1.21 he foreign subsidiary?s income statement for 2015 and balance sheet at December 31, 2015 can be und on the excel spread sheets attached. As the controller for LA Corporation, Inc, you have determined that the pound is the subsidiary?s functional currency. Required: a. Using the spreadsheet provided translate the foreign subsidiary?s financial statements into US Dollars at December 31, 2015, in accordance with US GMP. Insert a row in the spreadsheet after retained earnings and before total liabilities and stockholders? equity for the cumulative translation adjustment Calculate the translation adjustment separately to verify the amount obtained as a balancing figure in the translation worksheet. b. Using the spreadsheet provided remeasure the foreign subsidiary?'s financial statements into US Dollars at December 31, 2015, assuming that the US Dollar is the subsidiary?s functional currency. Insert a row in the spreadsheet after depreciation expense and before income before taxes for the remeasurement gain (loss). Calculate the remeasurement gain(loss) separately to support your answer. c. Explain why the translation adjustments,/remeasurement gain(Ioss) calculated in a and b are either positive or negative. You will not receive full credit if you ignore this requirement