Problem 2. Park Corporation, a US company, formed a British subsidiary on January 1, 2017 by investing 450,000 in exchange for all of the subsidiary's no-par common stock. The British subsidiary, Sar Corporation, purchased real property on April 1, 2017 at a cost of 500,000, with 100,000 allocated to land and 400,000 allocated to a building. The building is depreciated over a 40-year estimated useful life on a straight-line basis with no salvage value. The British pound is Sar's functional currency and its reporting currency. The British economy does not have high rates of inflation. Exchange rates for the pound on various dates were: January 01, 2017 1= $1.50 April 01, 2017 1 - $1.51 December 31, 2017 1 =$1.58 2017 average rate 1 = $1.56 Sar's adjusted trial balance is presented below for the year ended December 31, 2017 In Pounds Debits: Cash 220,000 Accounts receivable 52,000 Inventory 59,000 Building 400,000 Land 100,000 Depreciation expense 7,500 Other expenses 110,000 Cost of good sold 220,000 Total debits 1,168,500 Credits Accumulated depreciation 7,500 Accounts payable 111,000 Common stock 450,000 Retained earnings Equity adjustment Sales revenue 600,000 Total credits 1,168,500 Instructions: Prepare Sar's: 1. Translated trial balance; 2. Translated income statement; and 3. Translated balance sheet. 13-1