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Diekmann Company, a U.S.-based company, acquired a 100 percent interest in Rakona A.S. in the Czech Republic on January 1, 2019, when the exchange rate
Diekmann Company, a U.S.-based company, acquired a 100 percent interest in Rakona A.S. in the Czech Republic on January 1, 2019, when the exchange rate for the Czech koruna (Ks) was \$0.05. Rakona's financial statements as of December 31, 2020, two years later, follow: Additional Information - The January 1,2020 , beginning inventory of Ks 6,000,000 was acquired on December 18,2019 , when the exchange rate was $0.043. Purchases of inventory were acquired uniformly during 2020 . The December 31,2020 , ending inventory of Ks 8,500,000 was acquired in the latter part of 2020 when the exchange rate was $0.032. All depreciable assets (equipment and buildings) were on the books when the subsidiary was acquired-except for Ks 5,000,000 of equipment acquired on January 3,2020, when the exchange rate was $0.036, and Ks 12,000,000 in buildings acquired on March 5,2020 , when the exchange rate was $0.034. Straight-line depreciation is 10 years for equipment and 40 years for buildings. A full year's depreciation is taken in the year of acquisition. - Dividends were declared and paid on December 15,2020 , when the exchange rate was $0.031. - Other exchange rates for 1 Ks follow: Translate the Czech koruna financial statements at December 31, 2020, in the following three situations: a. The Czech koruna is the functional currency. The December 31, 2019, U.S. dollar-translated balance sheet reported retained earnings of $22,500. The December 31,2019 , cumulative translation adjustment was negative $202,500 (debit balance). b. The U.S. dollar is the functional currency. The December 31,2019 , U.S. dollar-remeasured balance sheet reported retained earnings (including a 2019 remeasurement gain) of $353,000. c. The U.S. dollar is the functional currency. Rakona has no long-term debt. Instead, it has common stock of Ks 20,000,000 and additional paid-in capital of Ks 50,000,000. The December 31, 2019, U.S. dollar-remeasured balance sheet reported a negative balance in retained earnings of $147,000 (including a 2019 remeasurement loss). Complete this question by entering your answers in the tabs below. Translate the Czech koruna financial statements at December 31, 2020 assuming the U.S. dollar is the functional currency. The December 31, 2019, U.S. dollar-remeasured balance sheet reported retained earnings (including a 2019 remeasurement :s should be indicated with a minus sign.) \begin{tabular}{|l|l|} \hline & US $ \\ \hline Income Statement: & \\ \hline Accounts receivable (net) & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline Income before remeasurement gain & \\ \hline Remeasurement loss, 2020 & \\ \hline & 0 \\ \hline & \\ \hline & \\ \hline & \\ \hline & \\ \hline Balance Sheet: & \\ \hline & \\ \hline & \\ \hline \end{tabular}
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