Bellingham Corporation, a U S company, acquired a 100 interest in Kayno Manufacturing, a Japanese company, on December 31, 2017, when the exchange rate for the Japanese yen (JPY)) was 103 960 Kaynos functional currency is the Japanese Yen Relevant exchange rates for JPY are Japanese yen Current rate December 31,2018 101 94 Current rate December 31,2017 103 96 Average rate for 2018 103 03 March 31, 2018 102 34 Rate when dividends were paid 103 75 Kanyo Adjusted trial balance December 31, December 31, 2017 2018 Accounts payable 4,300 5,200 Accounts receivable 2,050 2,810 Accumulated depreciaiton 6,600 8,325 Additional paid in capital 10,625 10,625 Amortization expense 785 Bonds payable 10,000 10,000 Cash 1,650 2,650 Common stock 4,000 4,000 Cost of goods sold 9,500 Depreciation expense 1,725 Discount on bonds payable 250 200 Dividends 1,250 Inventory (at FIFO cost) (at FIFO cost) 3,590 5,220 Other operating expenses Patent 925 Patent 7,850 7,065 Plant equipment 24,750 26,250 Retained earnings 4,615 4,615 Sales 15,615 Information relevant to selected balance sheet items 1 Kayno's inventories were purchased evenly throughout the year The 12 18 18 inventory was acquired when the exchange rate was JPY 103 881 2 Kayno Manufacturing purchased the Plant Equipment on the opening balance sheet in 2012 when the exchange rate was JPY 98 153 On March 31, 2017, Kayno purchased JPY 1,500 in equipment The equipment has a 15 year life with no salvage value Kayno computes depreciation to the nearest month 3 There have been no changes in Kayno's capital stock since Bellingham purchased its 100 interest on 12 31 17 4 Other operating expenses were incurred proportionately throughout 2018 Required Prepare an unclassified balance sheet, multistep income statement and a retained earnings statement, in good form, for Kayno Manufacturing in U S dollars for the year ended December 31, 2018 assuming Kayno's functional currency is the Japenese yen Also prepare a proof of the translation adjustment

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Bellingham Corporation, a U.S. company, acquired a 100% interest in Kayno Manufacturing, a Japanese company, on December 31, 2017, when the exchange rate for the

Bellingham Corporation, a U.S. company, acquired a 100% interest in Kayno Manufacturing, a Japanese company, on December 31, 2017, when the exchange rate for the Japanese yen (JPY)) was 103.960. Kaynos functional currency is the Japanese Yen. Relevant exchange rates for JPY are:

			Japanese yen
Current rate December 31,2018			101.94
Current rate December 31,2017			103.96
Average rate for 2018			103.03
March 31, 2018			102.34
Rate when dividends were paid			103.75

Kanyo Adjusted trial balance
			December 31,	December 31,
			2017	2018
			-	-
	Accounts payable		-4,300	-5,200
	Accounts receivable		2,050	2,810
	Accumulated depreciaiton		-6,600	-8,325
	Additional paid-in-capital		-10,625	-10,625
	Amortization expense		-	785
	Bonds payable		-10,000	-10,000
	Cash		1,650	2,650
	Common stock		-4,000	-4,000
	Cost of goods sold		-	9,500
	Depreciation expense		-	1,725
	Discount on bonds payable		250	200
	Dividends		-	1,250
	Inventory (at FIFO cost)	(at FIFO cost)	3,590	5,220
	Other operating expenses Patent		-	925
	Patent		7,850	7,065
	Plant& equipment		24,750	26,250
	Retained earnings		-4,615	-4,615
	Sales			-15,615

Information relevant to selected balance sheet items	-	-
1. Kayno's inventories were purchased evenly throughout the year. The 12/18/18 inventory was acquired
when the exchange rate was JPY 103.881.
2. Kayno Manufacturing purchased the Plant & Equipment on the opening balance sheet in 2012 when
the exchange rate was JPY 98.153. On March 31, 2017, Kayno purchased JPY 1,500 in equipment. The
equipment has a 15 year life with no salvage value. Kayno computes depreciation to the nearest month.
3. There have been no changes in Kayno's capital stock since Bellingham purchased its 100% interest on 12/31/17
4. Other operating expenses were incurred proportionately throughout 2018.
Required: Prepare an unclassified balance sheet, multistep income statement and a retained earnings
statement, in good form, for Kayno Manufacturing in U.S. dollars for the year ended December 31, 2018
assuming Kayno's functional currency is the Japenese yen. Also prepare a proof of the translation adjustment.