A subsidiary of a U.S. company began operations on January I, 2014, in a country whose currency is identified as hyperinflationary. The subsidiary's local currency (LC) is its functional currency. The subsidiary's trial balances as of the beginning and end of 2014, in LC, are as follows (in millions):

Sales and out of pocket operating expenses were incurred evenly throughout the year. The general price-level index for the country in which the subsidiary operates is:

Exchange rates (U.S. $/LC) are:

Required
Present the subsidiary's balance sheet at December 31, 2014 and income statement for 2014, in U.S. dollars, following (a) U.S. GAAP, and (b) IFRS. Include schedules of any gain or loss on conversion.

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January 1, 2014 Dr (Cr) 10,000 40,000 December 31, 2014 Dr (Cr) 125,000 35,000 (50,000) (50,000) (200,000) 135,000 5,000 0 Cash Plant assets, net.Eww. Liabilities Capital stock Sales revenue.. Out of pocket operating expenses. Depreciation expense. (50,000) 0 Price-level index Date January 1, 2014 2014 averages.. 100 400 600 Date Exchange rate $0.65 0.15 0.10 December 31, 2014