On January 1, 2014, a U.S. company purchased 100% of the outstanding stock of Ventana Grains, a company located in Latz City, New Zealand. Ventana Grains was organized on January 1, 2000. All the property, plant, and equipment held on January 1, 2014, was acquired when the company was organized. The business combination was accounted for as a purchase transaction. The 2014 financial statements for Ventana Grains, prepared in its local currency, the New Zealand dollar, are given here. VENTANA GRAINS Comparative Balance Sheets January 1 and December 31, 2014 Jan. 1 Cash and Receivables 499,000 Inventory 598,000 Land 401,000 Buildings (net) 656,000 Equipment (net) 469,000 Totals 2,623,000 Short-Term Accounts and Notes 296,000 Long-Term Notes (603,000 issued September 1, 2006, 73,000 issued July 1, 2014) 603,000 Common Stock 800,000 Additional Paid-in Capital 200,000 Retained Earnings 724,000 Total 2,623,000 Dec. 31 881,000 495,000 401,000 606,000 466,000 2,849,000 210,000 676,000 800,000 200,000 963,000 2,849,000 VENTANA GRAINS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014 Revenues 3,219,000 Cost of Goods Sold: Beginning Inventory 598,000 Purchases 2,112,000 Goods Available for Sale 2,710,000 Less: Ending Inventory 495,000 Cost of Goods Sold 2,215,000 Gross Profit on Sales 1,004,000 Depreciation Expense 138,000 Other Expenses 544,000 682,000 Net Income 322,000 Jan. 1 Retained Earnings 724,000 Total 1,046,000 Less: Dividends Paid 83,000 Dec. 31 Retained Earnings 963,000 The account balances are computed in conformity with U.S. generally accepted accounting standards. Other information is as follows: 1. Direct exchange rates for the New Zealand dollar on various dates were: Date January 1, 2000 September 1, 2010 January 1, 2014 July 1, 2014 December 31, 2014 Average for 2014 Average for the last four months of 2014 Exchange Rate $0.8011 0.5813 0.7924 0.7412 0.7298 0.7480 0.7476 2. Ventana Grains purchased additional equipment for 85,000 New Zealand dollars on July 1, 2014, by issuing a note for 73,000 New Zealand dollars and paying the balance in cash. 3. Sales were made and purchases and Other Expenses" were incurred evenly throughout the year. 4. Depreciation for the period in New Zealand dollars was computed as follows: Building Equipment-Purchased before 1/1/2014 Equipment-Purchased July 1, 2014 50,000 79,500 8,500 5. The inventory is valued on a FIFO basis. The beginning inventory was acquired when the exchange rate was $0.7480. The ending inventory was acquired during the last four months of 2014. 6. Dividends of 41,500 New Zealand dollars were paid on July 1 and December 31. Remeasure the financial statements into dollars assuming that the U.S. dollar was identified as the functional currency of the foreign subsidiary. (Round answers to o decimal places, e.g. 5,125. Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) New Zealand s Translation Rate U.S. Balance Sheet Totals Totals Consolidated Statement of Income and Retained Earnings