On January 1, 2014, Trenton 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 55,000

Net Property, Plant, and Equipment 40,000 37,000

Totals 60,000 92,000

Accounts and Notes Payable 30,000 32,000

Common Stock 20,000 20,000

Retained Earnings 10,000 40,000

Totals 60,000 92,000

GRANT MANAGEMENT CONSULTANTS Consolidated Income and Retained Earnings Statement for the Year Ended December 31, 2014

Revenues 75,000

Operating Expenses including Depreciation of 3,000 francs 30,000

Net Income 45,000

Dividends Declared and Paid 15,000

Increase in Retained Earnings 30,000 Direct exchange rates for Swiss franc are:

Dollars per Swiss Franc January 1, 2014 $1.09 December 31, 2014 1.03 Average for 2014 1.06 Dividend declaration and payment date 1.08

Required: A: Translate the year-end balance sheet and income statement of the foreign subsidiary using the current rate method of translation.

B: Prepare a schedule to verify the translation adjustment.