On January 1, 2014, Trenten Systems, a U.S.-based company, purchased a controlling interest in Grant Management Consultants located in Zurich, Switzerland. The acquisition was treated as a purchase transaction. The 2014 financial statements stated in Swiss francs are given below. GRANT MANAGEMENT CONSULTANTS Comparative Balance Sheets January 1 and December 31, 2014 Jan. 1 Dec. 31 Cash and Receivables 20,000 53,900 Net Property, Plant, and Equipment 40,500 37,700 Totals 60,500 91,600 Accounts and Notes Payable 30,200 32,000 Common Stock 19,900 19,900 Retained Earnings 10,400 39,700 Totals 60,500 91,600 GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014 Revenues 74,400 Operating Expenses including Depreciation of 2,800 francs 30.400 Net Income 44,000 Dividends Declared and Paid 14,700 Increase in Retained Earnings 29,300 Direct exchange rates for Swiss franc are: January 1, 2014 December 31, 2014 Average for 2014 Dividend declaration and payment date Dollars per Franc $0.5987 0.5321 0.5654 0.5810 (a) Your answer is correct. Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation. (Round answers to o decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Swiss Francs Translation Rate Consolidated Income and Retained Earnings Statement Revenues 74400 0.5654 42066 Operating Expenses 30400 0.5654 17188 Net Income /(Loss) 44000 24878 Retained Earnings - 1/1 10400 0.5987 6226 54400 31104 Dividends 14700 0.5810 8541 39700 22563 Retained Earnings - 12/31 Balance Sheet Cash and Receivables 53900 0.5321 28680 Net Property, Plant, and Eq 37700 0.5321 20060 Total 91600 48740 Accounts and Notes Payable 32000 0.5321 17027 Common Stock 19900 0.5987 11914 Retained Earnings 39700 22563 91600 51504 Cumulative Translation Adju (2764) Total 91600 48740 Prepare a schedule to verify the translation adjustment. (Round answers to 0 decimal places, e.g. 5,125. Enter loss and debit cumulative translation adjustment using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Swiss Francs Translation Rate Exposed Net Asset Position - 1/1 29400 0.5987 18200 Adjustment for Changes in the Net Asset Position During the Year Net Income 44000 0.5654 24878 Dividends (14700) 0.5810 (8541) Net Asset Position Translated Using Rate in Effect at Date of Transactions 34537 Exposed Net Asset Position - 12/31 59700 0.5321 31766 Cumulative Translation Adjustment (debit) (2764)