Pel, a U.S. firm, paid $308,000 for all the common stock of Sar of Israel on January 1, 2011, when the exchange rate for sheqels was $0.35. Sar's equity on this date consisted of 500,000 sheqels common stock and 300,000 sheqels retained earnings. The $28,000 (80,000 sheqels) excess is attributable to a patent with a 10-year amortization period. Sar's functional currency is the sheqel.

Sar's adjusted trial balance at December 31, 2011, in sheqels is as follows:

On January 2, 2011, Pel advanced $42,000 (120,000 sheqels) to Sar. This advance was shortterm, denominated in U.S. dollars, and made when the exchange rate for sheqels was $0.35. In June 2011, Sar paid a 100,000-sheqel dividend when the exchange rate was $0.33. The average and year-end exchange rates for sheqels are $0.32 and $0.30, respectively.REQUIRED1. Prepare a worksheet to translate Sar's adjusted trial balance at December 31, 2011, into U.S. dollars.2. Prepare the necessary journal entries for Pel to account for its investment in Sar for2011.

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Sheqels Sheqels Debits Cash Receivables-net Credits Accounts payable Other liabilities Advance from Pel Common stock Retained earnings 1/1 120,000 60,000 40,000 150,000 Inventories Land Equipment-net 140,000 160,000 300,000 500,000 300,000 600,000 Buildings-net Expenses Exchange loss (advance) Dividends Sales 100,000 1,720,000 1,720,000