Assume that our company owns a subsidiary operating in Germany.The subsidiary has adopted the Euro () as its functional currency.Following are the subsidiary's financial statements (in ) for the most recent year:

Subsidiary (in )

Income statement:

Sales

9,000,000

Cost of goods sold

(5,400,000)

Gross Profit

3,600,000

Operating expenses

(1,920,000)

Depreciation

(420,000)

Remeasurement gain or loss

Net income

1,260,000

Statement of retained earnings:

BOY retained earnings

4,725,000

Net income

1,260,000

Dividends

(126,000)

Ending retained earnings

5,859,000

Balance sheet:

Assets

Cash

2,561,400

Accounts receivable

2,088,000

Inventory

2,682,000

PPE, net

4,960,800

Total Assets

12,292,200

Liabilities and Stockholders' Equity

Current Liabilities

1,526,400

Long-term Liabilities

3,556,800

Common Stock

600,000

APIC

750,000

Retained Earnings

5,859,000

Total Liabilities & Equity

12,292,200

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Our subsidiary also reports the following additional financial statement information:

In Euros ()

Beginning inventory

2,235,000

Purchases

5,847,000

Ending inventory

(2,682,000)

Cost of Goods Sold

5,400,000

Land

1,960,800

Building

3,600,000

Accum Deprec. - Building

(1,800,000)

Equipment

2,400,000

Accum Deprec. - Equipment

(1,200,000)

PPE, net

4,960,800

Depreciation expense - building

180,000

Depreciation expense - equipment

240,000

Depreciation expense

420,000

The relevant exchange rates for the $US value of the Euro () are as follows:

BOY Rate

$1.30

EOY rate

$1.40

Avg. rate

$1.35

Dividend rate

$1.38

Historical rates:

Beginning inventory

$1.30

Land

$0.60

Building

$0.60

Equipment

$0.62

Historical rate (Common Stock and APIC)

$0.50

Required:Remeasure the subsidiary's income statement, statement of retained earnings, and balance sheet into $US using the temporal method for the current year (assume that the BOY Retained Earnings is $3,484,740).