Problem 10-37 (Static) (LO 10-1, 10-3, 10-4) Diekmann Company, a U.S.-based company, acquired a 100 percent interest in Rakona A.S. in the Czech Republic on January 1, 2019, when the exchange rate for the Czech koruna (Ks) was $0.05. Rakona's financial statements as of December 31, 2020, two years later, follow: - The January 1, 2020, beginning inventory of Ks 6,000,000 was acquired on December 18,2019 , when the exchange rate was $0.043. Purchases of inventory were acquired uniformly during 2020. The December 31, 2020, ending inventory of Ks 8,500,000 was acquired in the latter part of 2020 when the exchange rate was $0.032. All depreciable assets (equipment and buildings) were on the books when the subsidiary was acquired-except for Ks 5,000,000 of equipment acquired on January 3 , 2020, when the exchange rate was $0.036, and Ks 12,000,000 in buildings acquired on March 5,2020 , when the exchange rate was $0.034. Straight-line depreciation is 10 years for equipment and 40 years for buildings. A full year's depreciation is taken in the year of acquisition. - Dividends were declared and paid on December 15,2020 , when the exchange rate was $0.031. - Other exchange rates for 1 Ks follow: Translate the Czech koruna financial statements at December 31, 2020, in the following three situations: a. The Czech koruna is the functional currency. The December 31, 2019, U.S. dollar-translated balance sheet reported retained earnings of $22,500. The December 31, 2019, cumulative translation adjustment was negative $202,500 (debit balance). b. The U.S. dollar is the functional currency. The December 31, 2019, U.S. dollar-remeasured balance sheet reported retained earnings (including a 2019 remeasurement gain) of $353,000. c. The U.S. dollar is the functional currency. Rakona has no long-term debt. Instead, it has common stock of Ks 20,000,000 and additional paid-in capital of Ks 50,000,000. The December 31, 2019, U.S. dollar-remeasured balance sheet reported a negative balance in retained earnings of $147,000 (including a 2019 remeasurement loss). Translate the Czech koruna financial statements at December 31,2020 assuming the U.S. dollar is the functional currency. Rakona has no long-term debt. Instead, it has common stock of Ks 20,000,000 and additional paid-in capital of Ks 50,000,000. The December 31,2019 , U.S. dollar-remeasured balance sheet reported a negative balance in retained earnings of $147,000 (including a 2019 remeasurement loss). (Amounts to be deducted and negative amounts should be indicated with a minus sign.) Problem 10-37 (Static) (LO 10-1, 10-3, 10-4) Diekmann Company, a U.S.-based company, acquired a 100 percent interest in Rakona A.S. in the Czech Republic on January 1, 2019, when the exchange rate for the Czech koruna (Ks) was $0.05. Rakona's financial statements as of December 31, 2020, two years later, follow: - The January 1, 2020, beginning inventory of Ks 6,000,000 was acquired on December 18,2019 , when the exchange rate was $0.043. Purchases of inventory were acquired uniformly during 2020. The December 31, 2020, ending inventory of Ks 8,500,000 was acquired in the latter part of 2020 when the exchange rate was $0.032. All depreciable assets (equipment and buildings) were on the books when the subsidiary was acquired-except for Ks 5,000,000 of equipment acquired on January 3 , 2020, when the exchange rate was $0.036, and Ks 12,000,000 in buildings acquired on March 5,2020 , when the exchange rate was $0.034. Straight-line depreciation is 10 years for equipment and 40 years for buildings. A full year's depreciation is taken in the year of acquisition. - Dividends were declared and paid on December 15,2020 , when the exchange rate was $0.031. - Other exchange rates for 1 Ks follow: Translate the Czech koruna financial statements at December 31, 2020, in the following three situations: a. The Czech koruna is the functional currency. The December 31, 2019, U.S. dollar-translated balance sheet reported retained earnings of $22,500. The December 31, 2019, cumulative translation adjustment was negative $202,500 (debit balance). b. The U.S. dollar is the functional currency. The December 31, 2019, U.S. dollar-remeasured balance sheet reported retained earnings (including a 2019 remeasurement gain) of $353,000. c. The U.S. dollar is the functional currency. Rakona has no long-term debt. Instead, it has common stock of Ks 20,000,000 and additional paid-in capital of Ks 50,000,000. The December 31, 2019, U.S. dollar-remeasured balance sheet reported a negative balance in retained earnings of $147,000 (including a 2019 remeasurement loss). Translate the Czech koruna financial statements at December 31,2020 assuming the U.S. dollar is the functional currency. Rakona has no long-term debt. Instead, it has common stock of Ks 20,000,000 and additional paid-in capital of Ks 50,000,000. The December 31,2019 , U.S. dollar-remeasured balance sheet reported a negative balance in retained earnings of $147,000 (including a 2019 remeasurement loss). (Amounts to be deducted and negative amounts should be indicated with a minus sign.)