a. Abercrombie Co., a U.S. firm, formed a German company in 2018 by purchasing the common stock of the newly formed Dolce Inc. The functional currency of Dolce is the euro. During their first three years, dolce experienced the following activity in retained earnings:

2018 Net loss 1,000,000 euros

2019 Net income 2,000,000 euros

January 1, 2020 Dividend 500,000 euros

2020 Net income 750,000 euros

The following exchange rates could be relevant:

Date 1 euro equal to

December 31, 2017 $0.20

December 31, 2018 $0.22

Average 2018 $0.215

January 1, 2020 $0.245

Average 2019 $0.24

December 31, 2020 $0.26

Average 2020 $0.25

Required: What is the translated December 31, 2020, balance of the retained earnings for dolce?

1. Define the following:

1. Uncertainty Avoidance.

2. Professionalism.

3. Inductive Approach.

4. Financial reporting.

5. Exchange Rate.