Below is the balance sheet of US Amalgamated and its subsidiary, British Foods, LTD. The subsidiary is owned 100% by US Amalgamated, and their financials are in British pounds sterling.British Foods was purchased January 1, 2018. Because of light control of the subsidiary, the current rate method is used for translation.

You are to translate the subsidiary below, then record on US Amalgamated's books the profit and dividends. You are to show the elimination entries and consolidated statements. Lastly, you must prove the cumulative translation adjustment.

1. Record the profit and dividends on the books of Amalgamated

2. Prove the cumulative translation adjustment

British foods was purchased on Jan 1, 2018 at book value when net assets were 500,000 The cost was $750,000, as the exchange rate was $1.50 per 1.0 British pound sterling.On that date, British Foods had net monetary assets of 80,000 The exchange rate on December 31, 2018 is $1.60 per 1.0 British pound sterling, and the average rate for the year was $1.55 per 1.0 British pound sterling. The dividend was paid at $1.58 per 1.0 British pound sterling.

Elimination Entries Dr. Cr. Consolidated Sales Expenses using funds Depreciation Income from Subsidiary Net Income Dec 31, 2018 Dec 31, 2018 Translated US Amalga. British Foods British Foods $ 400,000 250,000 100,000 80,000 100,000 20,000 150,000 $ RE Jan 1, 2018 Dividends RE Dec 31, 2018 700,000 5,000 300,000 50,000 400,000 $ Cash Receivables Property (net) 100,000 200,000 500,000 100,000 150,000 400,000 Investment in BF Total Assets 650,000 $ 76,000 500,000 50,000 200,000 Payables Common Stock Translation Adjustment Retained Earnings, Dec 31 Total Liab and Equity 400,000 650,000 Elimination Entries Dr. Cr. Consolidated Sales Expenses using funds Depreciation Income from Subsidiary Net Income Dec 31, 2018 Dec 31, 2018 Translated US Amalga. British Foods British Foods $ 400,000 250,000 100,000 80,000 100,000 20,000 150,000 $ RE Jan 1, 2018 Dividends RE Dec 31, 2018 700,000 5,000 300,000 50,000 400,000 $ Cash Receivables Property (net) 100,000 200,000 500,000 100,000 150,000 400,000 Investment in BF Total Assets 650,000 $ 76,000 500,000 50,000 200,000 Payables Common Stock Translation Adjustment Retained Earnings, Dec 31 Total Liab and Equity 400,000 650,000