On January 1 ,2020 , A company in USA acquired 100% of equity of X Co, an Italian Company whose Functional Currency is Euro. The following data is provided of X Co Information Provided of X Co Values in Euro Retained Earnings of X Co at the time of its acquisition 1,54,399 Sales during the year 2020 7,45,600 Cost of Material Consumed 4,76,300 Other Expenses 1,48,800 Depreciation on Equipment & Buildings 45,458 Applicable Income Tax 16,884 Dividend declared by X Co on 1st Sept 2020 38,000 Inventory of X Co on 1st Jan 2020 56,500 The company uses the FIFO method of Stock Valuation
Exchange Rates of 1Euro into USD were as under: Date Ex Rate Euro to $ January 1 2020 1.1218 Sep 1,2020 1.1939 Dec 31 2020 1.2216 Average for 2020 1.1717 The other details of X Co were as under: Balance Sheet of X Co as on 31st Dec 20 Assets & Liabilities Euro Cash 21,400 Account Receivables 84,000 Inventory 62,500 Land 90,000 Buildings - Net 1,15,000 Equipment - Net 2,16,000 Total Assets 5,88,900 Accounts Payables 1,45,343 Bonds 80,000 Equity Share Capital 1,64,000 Additional Equity Shares Issued on 1st Jan 2020 25,000 Retained Earnings 1,74,557 Total Liabilities 5,88,900 You are required to calculate the year end Balance sheet and Income Statement of the foreign subsidiary using:
a. The Temporal Method
b. The Profit or Loss on Translation due to Ex Rates.