Case 5.2 On January 2, 2017, Sun Company, a us, based company, acquired for 2,000,000 francs an 80% interest in Moon Company, a Swiss company. On January, 2, 2017, Moon Company reported a retained earnings balance of 480,000 francs. Moon's books are maintained in francs and are in conformity with U.S. generally accepted accounting principles. Trial financial statements for Moon as of December 31, 2018, are presented here: Balance Sheet Cash Account Receivables Inventory (FIFO cost) Land Building (net) Equipment (net) 962,500 660,000 1,037,500 500,000 550,000 405,000 4,115,000 Total Assets Accounts Payable Short-Term Notes Payables Bonds Payable Common Stock Additional Paid in Capital Retained Earnings 1/1 Net income Dividends Total Liabilities and Equity 800,000 650,750 850,000 960,000 300,000 513,000 416,250 (375,000) 4,115,000 Income Statements Sales Cost of Goods Sold Depreciation Expenses Other Expenses Income Tax Expenses 3,775,000 (2,312,500) (125,000) (818,750) (102,500) 416,250 Other information follows: 1. Beginning Inventory of 830,000 francs was acquired when the exchange rate was $0.165 2. Purchases of Inventory made uniformly throughout 2018 were 2,520,000 francs 3. All plant assets were acquired before the parent obtained a controlling interest in the subsidiary