A U.S. Company, on January 2, 2018, purchased a 100% interest in a subdivision located in Spain. Sales were earned and operating expenses were incurred evenly during the year.

Exchange rates for the euro at various dates are:

January 2, 2018	1.202
December 31, 2018	1.208
Average for 2018	1.198
Dec. 10, 2018, dividends declared & paid	1.185
June 30, 2015	1.116

Notes: Read carefully and follow strictly so that Bb can grade you correctly! 1. Use comma in numbers, one thousand is 1,000, not 1000. Round to the nearest dollar: 1,000.45 should be 1,000, and 1,000.55 should be 1,001, no decimal points. No $ sign. 2. Use parenthesis ( ) for expenses, accumulated depreciation, dividends, and G/L or adjustments only!

Required:

Translate the year-end financial statements of the foreign subsidiary using the temporal method (Round numbers to the nearest dollar).

Translation of Financial Statements to U.S. Dollars

For Year Ended December 31, 2018

Balance Sheets
	Dec. 31, 2018	Exchange Rate	U.S. Dollars
Cash	295,000		$
Accounts receivable	385,000		$
Plant and equipment (net) (purchased 6/30/2015)	590,000		$
Land (purchased 6/30/2015)	355,000		$
Total Assets	1,625,000		$
Accounts payable	202,000		$
Long-term notes payable (issued 6/30/2015)	507,000		$
Common stock (issued 6/30/2015)	90,000		$
Retained earnings	826,000		$
Total Liabilities & Equity	1,625,000		$
Income Statement
Revenues	874,000		$
Depreciation	(35,000)		$
Operating exp. excld. Depreciation	(553,000)		$
Translation G/L			$
Net income	286,000		$
Statement of Retained Earnings
Retained earnings, beginning of year	725,000		$
Net income	286,000		$
	1,011,000		$
Dividends declared and paid	(185,000)		$
Ending retained earnings	826,000		$