PROBLEM $2-$ FOREIGN CURRENCY FINANCIAL STATEMENTS Foreign subsidiary adjusted trial balance at $\frac{12}{31}\frac{?}{20}2$ : FOREIGN SUBSIDIARY'S FINANCIAL STATEMENTS $($IN U$.$S$.$ $$\text{'}$s$)$ FOR $20$X$2$:

$($Functional Currency $=$ British Pounds$)$

COMPREHENSIVE. INCOME STATEMENT:

Net Income

OCl: Translation Gain$/($Loss$)$

Comprehensive Income

STATEMENT OF RETAINED EARNINGS:

BALANCE SHEET

Assets:

Total Assets

Liabilities:

Owners' Equitv:

Total Liabilities & Owners' Equity oreign subsidiary adjusted trial balance at $12/31/20$X$2$:FOREIGN SUBSIDIARY'S FINANCIAL STATEMENTS $($IN U$.$S$.$ $$\text{'}$s$)$ FOR $20$X$2$:

$($Functional Currency $=$ U$.$S$.$ Dollars$)$

COMPREHENSIVE. INCOME STATEMENT:

Net Income

OCl

Comprehensive Income

STATEMENT OF RETAINED EARNINGS:

RE $12/31$

BALANCE SHEEI

Assets:

Total Assets

Liabilities:

Owners' Equity:

Use the following information to answer questions $21$ to $24.$

Assume that XYZ Company purchased a $100\%$ interest in a foreign subsidiary on $\frac{1}{1}\frac{?}{20x2}.$ There have been no changes in the

common stock since the acquisition on $\frac{1}{1}\frac{?}{20}2.$ The only change in buildings since acquisition has been depreciation.

The equipment was purchased on $7/1/20$X$2.$ The subsidiary is using a $10-$year life and has taken a half year of

depreciation for $202.$

The accounts receivable were derived from sales that took place throughout $20$X$2.$

The note payable was issued on $1/1/20$X$2.$

Inventory is calculated on a FIFO basis. The ending inventory was purchased in the last quarter of $20$X$2.$ Purchases of

inventory amounting to $200,000$ pounds took place evenly throughout the year.

Dividends were paid on $7/1/20$X$2.$

The following is a list of exchange rates for British Pounds: