On January 1, 2020, Earl Corporation, a US firm, acquired a 70% interest in Mega Corporation, a foreign company, for $120,000, when Mega's stockholders' equity consisted of 300,000 local currency units (LCU) and retained earnings of 100,000 LCU. At the time of the acquisition, Mega's assets and liabilities were fairly valued except for a patent that did not have any recorded book value. All excess purchase cost was attributed to the patent, which had an estimated economic life of 10 years at the date of acquisition. The exchange rate for LCUs on January 1, 2020 was $.40. A summary of changes in Mega's stockholders' equity during 2020 and the exchange rates for LCUs is as follows: LOU Rates Dollars Stockholders' equity 1/1/20 400,000 S 40C S 160,000 Net income 100,000 42A 42,000 Dividends 12/1/20 50,000) 430 21,500) Equity adjustment 17,500 Stockholders' equity 12/31/20 450,000 44C S 198,000A wholly owned subsidiary of a Philippine parent company has certain expense accounts for the year ended December 31, 2020, stated in local currency units (LCU) as follows: LCU Depreciation of equipment (related assets were purchased January 1, 2018). 375,000 Provision for doubtful accounts. 250,000 Rent. 625,000 The exchange rates at various dates are as follows: Peso equivalent of 1 LOU December 31, 2020. PO.50 Average for year ended December 31, 2020.... 0.55 January 1, 2018. 0.40 Assume that the LCU is the subsidiary's functional currency and that the charges to the expense accounts occurred approximately evenly during the year. What total peso amount should be included in the translated income statement to reflect these expenses?A foreign subsidiary of the BB Corporation has certain balance sheet accounts on December 31,2020. Information relating to these accounts in pesos is as follows: Translated Current Historical Rates Rates Marketable Securities P 75,000 P 85,000 Inventories, carried at average cost . ... 600,000 700,000 Refundable Deposits . ... .. . . . . . . . .. . 25,000 30,000 Goodwill . . 55,000 70,000 P755,000 P885,000 O a. 770,000 O b. 765,000 O c. 755,000 O d. 885,000If the translated trial balance of S Company, a foreign subsidiary includes the following accounts (in pesos), determine the cumulative translation adjustment (debit or credit) on S's trial balance. Current Assets 450,000 Dividends 50,000 Plant Assets (net) 760,000 Liabilities 320,000 Cost of Goods Sold 329,000 Stockholders' Equity 782,000 Depreciation Expense 27,000 Sales 490,000 O a. 21,000 O b. no translation adjustment O c. 51,000 O d. 24,000On January 1, 2020, Earl Corporation, a US firm, acquired a 70% interest in Mega Corporation, a foreign company, for $120,000, when Mega's stockholders' equity consisted of 300,000 local currency units (LCU) and retained earnings of 100,000 LCU. At the time of the acquisition, Mega's assets and liabilities were fairly valued except for a patent that did not have any recorded book value. All excess purchase cost was attributed to the patent, which had an estimated economic life of 10 years at the date of acquisition. The exchange rate for LCUs on January 1, 2020 was $.40. A summary of changes in Mega's stockholders' equity during 2020 and the exchange rates for LCUs is as follows: LOU Rates Dollars Stockholders' equity 1/1/20 400,000 S 40C S 160,000 Net income 100,000 42A 42,000 Dividends 12/1/20 50,000) 430 21,500) Equity adjustment 17,500 Stockholders' equity 12/31/20 450,000 44C S 198,000Certain balance sheet accounts of a foreign subsidiary of RR Company have been stated in pesos as follows: Stated at Current Rates Historical Rates Accounts receivable, current . .. ... P200,000 P220,000 Accounts receivable, long term . . .. 100,000 110,000 Prepaid Insurance . . . . . . ... 50,000 55,000 Goodwill . 80,000 85,000 P430,000 P470,000 This subsidiary's functional currency is a foreign currency. What total should RR's balance sheet include for the preceding items? O a. 440,000 O b. 450,000 O c. 430,000 O d. 470,000On January 1, 2020, Earl Corporation, a US firm, acquired a 70% interest in Mega Corporation, a foreign company, for $120,000, when Mega's stockholders' equity consisted of 300,000 local currency units (LCU) and retained earnings of 100,000 LCU. At the time of the acquisition, Mega's assets and liabilities were fairly valued except for a patent that did not have any recorded book value. All excess purchase cost was attributed to the patent, which had an estimated economic life of 10 years at the date of acquisition. The exchange rate for LCUs on January 1, 2020 was $.40. A summary of changes in Mega's stockholders' equity during 2020 and the exchange rates for LOUs is as follows: LOU Rates Dollars Stockholders' equity 1/1/20 400,000 S 40C S 160,000 Net income 100,000 .42A 42,000 Dividends 12/1/20 50,000) 430 21,500) Equity adjustment 17,500 Stockholders' equity 12/31/20 450,000 440 S 198,000