Phi, a U.S. firm, acquired 100 percent of Stu's outstanding stock at book value on January 1, 2011, for $112,000. Stu is a New Zealand-based company, and its functional currency is the U.S. dollar. The exchange rate for New Zealand dollars (NZ$) was $0.70 when Phi acquired its interest. Stu's stockhold- ers' equity on January 1, 2011, consisted of NZ$150,000 capital stock and NZ$10,000 retained earn ings. The adjusted trial balance for Stu at December 31,2011, is as follows Debits Cash Accounts receivable-net Inventories Prepaid expenses Land Equipment Cost of sales Depreciation expense Other operating expenses Dividends NZ$15,000 60,000 30,000 10,000 45,000 60,000 20,000 12,000 28,000 20,000 NZ$400,000 Credits Accumulated depreciation Accounts payable Capital stock Retained earnings Sales NZ$22,000 18,000 150,000 10,000 200,000 NZ$400,000 ADDITIONAL INFORMATION 1. Prepaid expenses (supplies) of NZ$18,000 were on hand when Phi acquired Stu. Other operating ex- penses include NZ$8,000 of these supplies that were used in 2011. The remaining NZ$ 10,000 of supplies is on hand at year-end