Consolidating an International Subsidiary, Year of Acquisition On February 1, 2019, Pathway Inc., a U.S. company, acquired all of the outstanding shares of Superbarn Supermarkets, an Australian chain, for A$150 million in cash. Superbarn's assets and liabilities were reported at amounts approximating fair value, but it had previously unrecorded intangible assets (5-year life, straight-line) valued at A$10 million. Superbarn's functional currency is the Australian dollar (A$). Pathway uses the complete equity method to record its investment in Superbarn on its own books. The January 31, 2020 trial balances of the two companies are below. Pathway Superbarn (in thousands) Cash and receivables Inventories Plant and equipment, net Investment in Superbarn Liabilities Capital stock Retained earnings, February 1 Dividends Sales revenue Equity in net income of Superbarn Equity in other comprehensive loss of Superbarn Cost of goods sold Operating expenses Dr (Cr) $ 15,000 90,000 776,500 118.650 Dr (Cr) A$ 5,000 30,000 355,000 (874,000) (345,000) (25,000) (10,000) (85,000) (20,000) 2,000 (1,500,000) (500,000) (6,000) 2,850 1,000,000 485,000 $0 400,000 85,000 A$ 0 Exchange rates: February 1, 2019 $0.77/A$ Average for fiscal 2020 0.75/A$ January 31, 2020 0.70/A$ Goodwill arising from the acquisition of Superbarn was impaired by A$5 million in fiscal 2020. a. Prepare a working paper to consolidate the trial balances of Pathway and Superbarn for fiscal 2020. 1. Translate Superbarn's January 31, 2020 trial balance. Use negative signs with Cr (credit balance) answers. Dr(Cr) Trial Balance A$ (in thousands) Dr(Cr) $/A$ Cash and receivables A$ 5,000 $ Inventories 30,000 Property and equipment, net 355,000 Liabilities (345,000) Capital stock (10,000) Retained earnings, February 1 (20,000) Sales revenue (500,000) Cost of goods sold 400,000 Operating expenses 85,000 Translation gain or loss (below) A$ 0 5 13