Fortune Company is a wholly owned subsidiary of Philbiz Corporation; a Philippine based organization. Fortune operates in a foreign country with financial statements recorded in miza (MZ), the company's financial currency.

The currency exchange rates per 1 MZ for the current year are as follows:

January 1, 201412.50

April 1, 201412.90

June 1, 201412.80

December 31, 2014 13.00

Weighted average rate12.70

The ordinary stock was issued on December 31, 2012 when the exchange rate was P 2.40 = 1 MZ; fixed assets were acquired on December 31, 2013 when the rate was P 2.60 = 1 MZ; and the inventory on December 31, 2013 was acquired on December 31, 2013.

As of January 1, 2014, the retained earnings balance was translated as P 395,000.

Dividends were declared on April 1, 2014 and paid on June 1, 2014.

Required: Translate the foreign operation's financial statements into the presentation currency of the parent. Use current rate method. Financial statements of Fortune Company for the year of 2014 are as follows:

MZPhilippine Peso

Income Statement

Sales270,000_____________

Cost of sales145,000_____________

Gross profit125,000_____________

Depreciation4,000_____________

Other operating expenses 50,000_____________

Net profit71,000_____________

Retained Earnings:

Retained earnings, Jan 1 216,000_____________

Net profit71,000_____________

Total 287,000_____________

Dividends26,000_____________

Retained earnings, Dec 31 261,000_____________

Balance Sheet:

Cash44,000_____________

Accounts Receivable 116,000_____________

Inventory 58,000_____________

Fixed assets, net 339,000_____________

Total Assets 557,000_____________

Liabilities 176,000_____________

Ordinary stock 120,000_____________

Retained earnings, Dec 31 261,000_____________

Translation reserve_____________

Total Liabilities and Equity 557,000_____________