Jambaara Inc., an American company, established ownership in a subsidiary operating in Japan on 4 April 2008 by subscribing to shares in cash when the exchange rate was 13 ¥ to the $US. The balance sheet and income statement of the subsidiary for the year of 2009 follow:

Income Statement

	¥
Sales Revenue	450,000
-Cost of Goods Sold	360,000
Gross Profit	90,000
- Other Expenses:
Distribution Expense	2,000
Cleaning Expenses	3,000
Supplies Expense	5,000
Interest Expense	5,000
Electricity Expense	13,000
Insurance Expense	7,000
Wages & Salaries Expense	4,000
Depreciation Expense: Furniture & Fixtures	3,000
Depreciation Expense: Buildings	5,000
Depreciation Expense: Tools & Equipment	2,000
Net Profit	41,000

Balance Sheet

	¥
Assets
Cash	57,000
Accounts Receivables	12,000
Notes Receivable	15,000
Inventory	40,000
Buildings	180,000
Tools & Equipment	40,000
Furniture & Fixtures	130,000
Accumulated Depreciation: Building	(15,000)
Accumulated Depreciation: Furniture & Fixtures	(8,000)
Accumulated Depreciation: Equipment	(10,000)
Total Net Assets	441,000
Liabilities & Stockholders’ Equity
Liabilities:
Notes Payable	30,000
Accounts Payable	15,000
Bonds Payable	55,000
Total Liabilities	100,000
Stockholders’ Equity:
Share Capital	300,000
+ Retained Earnings	41,000
Total Stockholders’ Equity	341,000
Total Liabilities & Stockholders’ Equity	441,000

Exchange Rates:	¥ to $US
April 4 (when shares sold)	13
Average for the year	11
December 31	10
When Buildings and Furniture purchased	9
When Land purchased	12
When Equipment Purchased	11
When Inventory Purchased	13

Required:

Translate using the Monetary Non-Monetary method

Answer rating: 100% (QA)

Income Statement Sales Revenue Cost of Goods Sold Gross Pro... View the full answer