**Advanced Accounting

Question 1: (10 marks) (B1, CI) IBM Corporation, a U.S. Company, formed a subsidiary with a new company in Paris on January 1, 2019, by investing 50,000 Euro in exchange for all of the subsidiary's common stock. The subsidiary balance sheet on December 31,2019 is presented below. It reported net income of 38,000 Euro in 2019 and declared dividend of 6,000 Euro on December 31,2019. Exchange rates for the Euro on various dates were: January 1, 2019 October 1, 2019 Average for 2019 December 31, 2019 1 Euro = $2.40 1 Euro = $2.22 1 Euro = $2.28 1 Euro = $2.16 Instructions: Translate the subsidiary's balance sheet below into U.S dollars using current method. Balance Sheet December 31,2019 Rate U.S Dollars Account Cash Account Receivable Building Accumulated depreciation Total Assets Euro 49,000 12,000 170.000 (17,000) 214.000 Interest Payable Notes Payable Common Stock Retamed Eamings 12.000 120.000 50,000 32.000 Total Liabilities and Equites 214.000