On 31/12/2020 a British company (uses British pound for reporting) has a wholly-owned Italian subsidiary (uses euro for reporting) . The functional currency for the subsid Question 8 Not yet answered pound Marked out of 1 Following is the trial balance for the Italian company on 31/12/2020 31/12/2020 Dr Cr P Flag question Cash 1,000 Accounts receivable 2.000 Inventory 3,000 Property, plant, & Equipment 10,000 Cost of goods sold 7,000 Depreciation expense 2,000 Other expenses 5,000 Sales 17,000 Accounts payable 1,000 Capital 8.000 Retained earnings 4.000 TOTAL 30,000 30,000 Following are relevant exchange rates 31/12/2020 0.65 1/1/2020 0.75 Average 2020 0.66 10/10/2015 0.85 Date when PPE was purchased 18/12/2020 Date when ending 0.71 inventory was purchased 1/1/2015 0.90 Date for subsidiary purchase Notes: a- The subsidiary was purchased on 1/1/2015. Capital has not changed since then. b- Cost of goods sold is for inventory purchased at the average rate for 2020 Required: 1- Remeasure the above figures from euros to British pounds as at 31/12/2020 2- Calculate the subsidiary's net income (or net loss) as at 31/12/2020