perform transactions under both current snd temporal method

Current Rate Method LO7 Dorsey Corporation purchased 90% of the common stock of Lansing Company on January 1, 2002. The cost of the investment was equal to the book value interest acquired. Lansing Com- pany operates two retail stores and an exporting business in London that specializes in buy- ing and selling British tweeds. The subsidiary provided the following financial statements in pounds to the parent company: Sales Cost of Goods Sold Depreciation Expense Other Expenses Net Income 1/1 Retained Earnings Less: Dividends Declared and Paid, December 31 12/31 Retained Earnings 2,900,000 (1,400,000) (300,000) (400,000) 800,000 900,000 1,700,000 (325,000) 1,375,000 LANSING COMPANY Balance Sheet December 31, 2008 Cash and Receivables Merchandise Inventory Property. Plant, and Equipment Total Current Liabilities Long-Term Notes Payable Capital Stock Retained Earnings "Total 1.275,000 490,000 3,450,000 5,215,000 640,000 1,200,000 2,000,000 1,375,000 5,215,000 Lansing Company was incorporated on January 1, 2000, at which time all the property, plant, and equipment was purchased. The long-term notes were issued to partially finance the pur chase of the fixed assets. Direct exchange rates for the British pound are as follows: January 1, 2000 $1.8996 January 1, 2002 1.8365 Average for the last quarter 2007 1.5800 January 1, 2008 1.4919 December 31, 2008 1.4730 Average for 2008 1.4788 Average for August-December 2008 1.4950 The January 1, 2008, retained earings balance of Lansing in dollars was $1,593,408, and the cumulative translation adjustment was a debit balance of $999,898. The beginning inventory of $420,000 was acquired during the last quarter of 2007 and the ending inventory was ac quired during the last five months of 2008. Sales were made and purchases and other ex- penses were incurred evenly during the year