BUSINESS COMBINATION

Translation of Foreign Currency Financial Statements and Operations

The following is the trial balance as of December 31, 2009 of TKC Company, a British subsidiary of Philippine Co. It has been adjusted to conform to generally accepted accounting principles and is expressed in pounds. Cash E 2,500 Accounts Receivable 4,000 Inventories, at cost 5,500 Prepaid Expenses 750 Property Plant and Equipment 12,000 $ 24,750 Accounts Payable E 3,500 Current Portion of Long-term Debt 500 Long-term Debt 7,500 Accumulated Depreciation 3,000 Ordinary Shore Capital 5,000 Accumulated Profits, 1/1/09 2,500 Sales 90,000 Cost of Sales (20,000) Depreciation Expense (1.500) Other Expenses (5.750] $ 24,750Additional Information: 1. The balance of the Foreign Currency Translation Adjustment account at December 31, 2008 was P50.000 [credit] 2. The peso balance of Accumulated profits at December 31, 2008 was P119,500. 3. When TKC Company was incorporated, the exchange rate was $1 = P67.20. No share capital changes have occurred since then. 4. Exchange rates were as follows: January 1, 2009 18 = P67.40 December 31, 2009 (and last quarter for 2008] 18 = P67.60 Average for 2009 18 = P67.50 5. All receivables, payables, and long-term debts are denominated in pounds. 6. Sales, purchases, and expenses occurred evenly throughout the year. Required: Translate the financial statements of TKC Company into Philippine pesos