Alpar Corporation formed a wholly owned subsidiary, Besub Enterprise, in country X (whose currency is the FC) on 31 December 20x0 with an initial paid-up capital of FC 10,000,000. Besub reported earnings of FC 2,000,000 and FC 3,000,000 for the years ended 31 December 20x1 and 20x2, respectively. Besub Enterprise had not declared any dividends since its incorporation and had no other reserves. On 31 December 20x2, Alpar Corporation disposed of its entire investment in Besub Enterprise for FC 18,000,000. Besub’s functional currency is the FC. Alpar Corporation’s functional and presentation currency is the dollar. Relevant exchange rates are as follows:

Required
1. Show the amount of profit or loss on the sale of Besub in the income statement of Alpar Corporation for the year ended 31 December 20x2.
2. Show the amount of profit or loss on the sale of Besub in the consolidated income statement of Alpar Corporation for the year ended 31 December 20x2.

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31 December 20x0. Average rate for 20x1. 31 December 20x1...... Average rate for 20x2. 31 December 20x2.. FC 1 = $1.20 $1.25 $1.30 $1.28 $1.23