Multico, a US company forms a wholly owned subsidiary in Italy (Italco) on 12/31/2009. On that day, Multico invests $1,350,000 in exchange for all of the subsidiary's capital stock. Italco purchased its inventory on 12/31/2009 and its beginning balance sheet on 01/01/2010 is as follows:

January 01, 2010
Assets	Euro	Liabilities and Equity	Euro
Cash Inventory	400,000 600,000	Capital Stock	1,000,000

BALANCE SHEET Dec. 31, 2010
	Euro		Euro
Cash	750,000	A/P	330,000
A/R	600,000	Long-term liabilities	2,000,000
Inventory	800,000
PPE	2,000,000	Capital Stock	1,200,000
Acc. Depr.	(200,000)	Retained Earnings	500,000
Patent, net	80,000
Total assets	4,030,000	Total resources	4,030,000

INCOME STATEMENT 2010	Euro
Sales	8,000,000
Cost of Goods Sold	6,000,000
Selling and Administrative expenses	500,000
Depreciation expense	200,000
Amortization expense	20,000
Interest expense	180,000
Income tax expense	275,000
Net income	825,000

Relevant exchange rates for 2010 are as follows:

January 1, 2010	1.35
Rate when PPE are acquired and long-term debt was incurred, Jan. 15, 2010	1.32
Rate when patent was acquired and capital was increased Feb. 01, 2010	1.32
Average for 2010	1.30
Rate when dividends was declared Dec. 01, 2010	1.27
Average for the month of December	1.26
Dec. 31, 2010	1.25

Translation the Italy subsidiary's financial statements into USD using temporal method and current rate method.(calculate 2 tables follow)

Statement of Retained Earnings, 2010
	Euro	Translation Rate	USD
RE, 01/01/10	100,000
Net income	825,000
Dividend, 12/01/10	425,000
RE, 12/31/10	500,000

Calculation for Capital Stock
	Euro	Translation rate	USD
Beginning
Added
Ending