Question 3 (25 points) Lucky Star Co. began operating a subsidiary in a foreign country on January 1, 2021 by acquiring all of the common stock for $50,000 Stickles, the local currency. This subsidiary immediately borrowed $120,000 on a five-year note with ten percent interest payable annually beginning on January 1, 2022. A building was then purchased for $170,000 on January 1, 2021. This was all done without intervention by Lucky Star. This property had a ten- year anticipated life and no salvage value and was to be depreciated using the straight-line method. The building was immediately rented for three years to a group of local doctors for $6,000 per month. By year-end, payments totaling $60,000 had been received. On October 1, $5,000 were paid for a repair made on that date and it was the only transaction of this kind for the year. Lucky Star is not concerned about cash repatriation. Nevertheless, a cash dividend of 56,000 was transferred back to Lucky Star on December 31, 2021. The functional currency for the subsidiary was the Stickle ($). Currency exchange rates were as follows: a January 1, 2021 October 1, 2021 Average for 2021 December 31, 2021 51 - $ 2.40 51 - $ 2.22 $1= $ 2.28 $1= $ 2.16 Required AVA Required: A Identify and explain the appropriate method of translation for the financial statements of the foreign subsidiary? [3 marks) B. Prepare the following statements for this subsidiary in stickles and then translate the amounts into Canadian dollars: 1 Income statement [4 marks] Statement of Retained Earnings [3 marks) Balance Sheet (assume at year end cash balance amounted to $72,000) [15 marks) MacBook Air