Pan Corporation, a U.S. company, formed a British subsidiary on January 1, 2014 by investing 450,000 British pounds (f) in exchange for all of the subsidiary's no-par common stock. The British subsidiary, Skillet Corporation, purchased real property on April 1, 2014 at a cost of 1500,000, with f 100,000 allocated to land and ?400,000 allocated to a building. The building is depreciated over a 40-year estimated useful life on a straight-line basis with no salvage value. The British pound is Skillets functional currency and its reporting currency. The British economy does not have high rates of inflation. Exchange rates for the pound on various dates were:

Skillet?s adjusted trial balance is presented below for the year ended December 31, 2014.

Required: Prepare Skillet?s:

1. Translation working papers;

2. Translated income statement

January 01, 2014 April 01, 2014 December 31, 2014 = 2014 average rate 1 = 1 = 1 = 1 = $1.60 $1.61 $1.68 $1.66 Debits: Cash Accounts receivable Inventory Building Land Depreciation expense Other expenses Cost of goods sold Total debits In Pounds 220,000 52,000 59,000 400,000 100,000 7,500 110,000 220,000 1,168,500 Credits Accumulated depreciation Accounts payable Common stock Retained earnings Equity adjustment Sales revenue Total credits 7,500 111,000 450,000 0 0 600,000 1,168,500