CASE IRANSLATING FOREIGN CURRENCY FINANCIA EL L STATEMENTS Charles Edward Company investing FC 3,200,000 when the exchange rate was S0.50/FC. Charles Edwar loan of FC 3,000,00 FC 6,000,000 on Ja established a subsidiary in a foreign country on January 1, 2015, by 00 on January 5, 2015, and purchased plant and equipment in the amount of nuary 8, 2015. It depreciated plant and equipment on a straight-line basis over a 10-year useful life. It purchased its begin and acquired additional inventory of FC 4,000,000 average exchange rate of S0.43/FC. It uses the first-in, of goods sold. Additional exchange rates per FC 1 during the year 2015 follow: ning inventory of FC 1.000,000 on January 10, 2015 at three points in time during the year at an first-out (FIFO) method to determine cost January 1-31, 2015. Average 2015 December 31, 2015. $0.50 0.45 0.38 The foreign subsidiary's income statement for 2015 and balance sheet at December 31, 2015, follow: INCOME STATEMENT For the Year Ended December 31, 2015 FC (in thousands) Sales Cost of goods sold Gross profit.. Selling expense Depreciation expense . Income before tax . Income taxes Net income. Retained earnings, 1/1/15... FC 5,000 3,000 2,000 400 600 1,000 300 700 Retained earnings, 12/31/15. . FC 700 BALANCE SHEET At December 31, 2015 FC (in thousands) Cash Inventory. Fixed assets FC 1,000 2,000 6,000