Q4: The US Company, Dana Company forms a wholly owned subsidiary in Italy on December year 0. The subsidiary made income of Euro 2235000 on December, year 1 with ending inventory Euro 300000. All data in the statements below are in EURO currency. You are required to translate the income statement into US dollar using the temporal method. 5 Marks. CLO 3 1. Table 1 shows the exchange rate between the euro and the US dollar at various times Details New Rate January 1, Year! 1.50 Rate for property, equipment and debt 1.40 Rate when patent was acquired, 1.37 Average year 1.32 Rate when dividend declared, 1.27 December 1 Average for month of December 1.26 December 31, Year! 1.25 Table 2 below shows the beginning balance sheet of its branch in Italy in EURO: Assets Liability and equity Cash 500000 Capital Stock 1000000 Inventory 500000 Total 1000000 Total 1000000 Table 3 below shows the Income Statement of its branch in EURO currency: Sales 9000000 Tess cost of goods sold (5000000) Gross Profit 40000000 Selling expense (700000) Depreciation expense (50000) Amortization expense (20000) Interest expense (150000) Income before taxes 2980000 Income tax [(745000) Net income 2235000