On January 2, 2013, Maddox Corporation, headquartered in the U.S., established a wholly-owned subsidiary in Mexico City.

Question:

On January 2, 2013, Maddox Corporation, headquartered in the U.S., established a wholly-owned subsidiary in Mexico City. An initial investment of $1,000,000 was made on that date; the was $0.10/peso. During 2013, the following cash transactions occurred at the Mexico City subsidiary. All amounts are in pesos (P).
Legal expenses of organizing the subsidiary (January 2; 5-year life)P 300,000
Purchase of office equipment (April 1; 10-year life)1,000,000
Sales12,000,000
Merchandise purchases9,000,000
Operating expenses3,000,000
The was $0.11/P in April when the office equipment and P2,000,000 of merchandise were purchased. Sales, other merchandise purchases, and operating expenses were assumed to have been made or incurred at an average of $0.12/P. At year-end, the was $0.15/P and the ending inventory (LIFO) amounted to P2,000,000. All depreciation and amortization is straight-line.
Required
Prepare the and income statement for the Mexico City subsidiary as of December 31,2013, in dollars, the subsidiary's functional currency. Show all calculations. Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial... Exchange Rate
The value of one currency for the purpose of conversion to another. Exchange Rate means on any day, for purposes of determining the Dollar Equivalent of any currency other than Dollars, the rate at which such currency may be exchanged into Dollars...