Chapter 12 Class lllustration and Homework Problem Facts Pepper Corporation purchased 90% of the common stock of Salt Company on January 1, 2013, The cost of the investment was equal to the book value interest acquired. Salt Company operates two retail stores and an exporting business in London that specializes in buying and selling British clothes. Salt Company was incorporated on January 1, 2011, at which time all the property, plant, and equipment was purchased. The long-term notes were issued to partially finance the purchase of the fixed assets. Direct exchange rates for the British pound are as follows: January 1, 2011 $1.8996 January 1, 2013 1.8365 Average for the last quarter of 2018 1.5300 January 1, 2019 1.4919 December 31, 2019 1.4730 Average for 2019 1.4788 Average for August-December 2019 1.4950 Dividends were declared and paid on December 31, 2019. The January 1, 2019, retained earnings balance of Salt in dollars was $1,593,408, and the cumulative translation adjustment was a debit balance of $939,898. The beginning inventory of 420,000 was acquired during the last quarter of 2018 and the ending inventory was acquired during the last five months of 2019. Sales were made and purchases and other expenses were incurred evenly during the year. Required: a. On GauchoSpace you will find an Excel file labeled, \"Current Rate and Temporal Method Worksheet. Using this worksheet provided, translate the December 31, 2019, account balances of Salt Company into dollars assuming that the pound is the functional currency of Salt Company. b. Using the same worksheet as requirement \"a.\" above, remeasure the December 31, 2019, account balances of Salt Company into dollars assuming that the US dollar is the functional currency of Salt Company. The beginning retained earnings balance of Salt Company in dollars was $1,791,324