On 31 December 2019, Premier Company, a manufacturer of watches, acquired the entire share capital of Soft Company., a foreign manufacturer of belts, whose currency is the ABC. At the date of acquisition, Soft Company's Statement of Financial Position was as follows: Soft Co. Statement of Financial Position as at 31 December 2019 Assets ABC Property, plant and equipment 400,000 Inventories 200,000 Account receivable 300,000 Account payable (160,000) Net assets 740,000 Share capital 400,000 Retained earnings 340,000 Total equity 740,000 The followings are the financial statements of Soft Company for the year ended 31 December 2020: Soft Co. Income Statement for the year ended 31 December 2020 ABC Sales 1,600,000 Cost of goods sold (940,000) Gross profit 660,000 Depreciation (50,000) Operating expenses (400,000) Profit before tax 210,000 Taxation (40,000) Profit after tax 170,000 (50,000) Dividends paid Retained profit for the year 120,000 Retained earnings at 1 January 340,000 Retained earnings at 31 December 460,000 Soft Co. Statement of Financial Position as at 31 December 2020 Assets ABC Property, plant and equipment 450,000 Inventories 240,000 Account receivable 400,000 10,000 Cash Account payable (240,000) Net assets 860,000 Share capital 400,000 Retained earnings 460,000 Total equity 860,000 Additional Information: 1. Assets are depreciated using the straight line method at the rate of 10%. During 2020, production equipment costing ABC100,000 was purchased. It is the company policy that a full year's depreciation is recorded in the year of purchase. 2. Relevant exchange rates are as follows: At 31 December 2019 At date of payment of dividends Ending Inventories (2020) purchased At the date of equipment purchased Average rate for 2020 At 31 December 2020 1ABC = $1.50 1 ABC = $1.40 1 ABC = $ 1.38 1 ABC = $1.48 1 ABC = $1.42 1 ABC = $1.35 Required: a. Using closing rate method, translate the 2020 financial statements of Soft Co. into dollars assuming that Soft Co.'s functional currency is the ABC. b. Show the translation difference by doing a reconciliation check (or proof of translation gain or loss)