Giant Eagle Inc., a U.S.-based grocery store, established a subsidiary in Mexico (RetailMex S.A.) by investing Mex$25,000,000 on January 1, 2012, when the exchange rate was $0.25 per Mex$. The financial statements of RetailMex as of December 31, 2013, two years later, are as follows:

Balance Sheet December 31, 2013

Cash	1,000,000
AR	1,650,000
Inventory	4,250,000
Equipment	12,500,000
Less: Accumulated Depreciation	(2,250,000)
Building	36,000,000
Less: Accumulated Depreciation	(3,300,000
Land	3,000,000
Total Assets	52,850,000

Liabilities and Stockholders Equity

Current Liabilities	3,100,000
Long-Term Debt	22,000,000
Capital Stock	25,000,000
Retained Earnings	2,750,000
Total Liabilities and Stockholders Equity	= 52,850,000

Statement of Income For the Year Ending December 31, 2013

Sales	14,000,000
COGS	(6,000,000)
Gross profit	8,000,000
Depreciation expense: Equipment	(1,250,000)
Depreciation Expense: Building	(1,800,000)
Other Expenses	(850,000)
Income Before Taxes	4,100,000
Tax	(850,000)
Net Income	3,250,000

Statement of Retained Earnings

For the Year Ending December 31, 2013

Retained Earnings, 1/1/13	250,000
Plus: Net Income, 2013	3,250,000
Less: Dividends, 12/15/2013	(750,000)
Retained earnings, 12/31/2013	2,750,000

ADDITIONAL INFORMATION:

The January 1, 2013 beginning inventory of Mexico, $3,000,000 was acquired on December 15, 2012, when the exchange rate was $0.23. Purchases of inventory during 2013 were acquired uniformly throughout the year. The December 31, 2013 ending inventory of Mexico, $4,250,000 was acquired evenly throughout the fourth quarter of 2013, when the average exchange rate was $0.175.

All fixed assets were acquired on January 1, 2012 except for Mexico, $2,500,000 of equipment and Mexico, $6,000,000 of building which were both acquired on January 1, 2013, when the exchange rate was $0.20. Equipment is depreciated on a straight-line basis over 10 years. Buildings are depreciated on a straight-line basis over 20 years.

Dividends were declared on December 15, 2013, when the exchange rate was $0.17.

Other relevant exchange rates are as follows. The average exchange rate for 2013 was $0.18 and the exchange rate on December 31, 2013 was $0.16.

2. Assuming that RetailMexs functional currency is the U.S. dollar, remeasure RetailMexs financial statement into U.S. dollars at December 31, 2013. Retained earnings appeared in RetailMexs translated financial statements on December 31, 2012 were $802,500.