Financial Statement Translation World Company’s Subsidiary A operates in Canada, and its financial statements are presented in Canadian dollars. The subsidiary was established on January 1, 2001, and had no retained earnings at that date. It paid no dividends in 2001.

All revenues and expenses occurred uniformly throughout the year. World Company is located in the United States and must translate the subsidiary’s financial statement into U.S. dollars before preparing consolidated financial statements. Subsidiary A’s income statement and balance sheet appear as follows:

Prepare Subsidiary A’s income statement and balance sheet translated into U.S. dollars. Include the cumulative translation adjustment.

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World Company-Subsidiary A Balance Sheet December 31, 2001 Assets Current assets Property, plant, and equipment (net) Total assets Liabilities and Equities Current liabilities Long-term notes payable Common stock Retained earnings Total liabilities and equities C$ 55,000 285,000 C$340,000 C$ 20,000 115,000 100,000 105.000 C$340,000