QUESTION 3 HAS TWO PARTS (A, B) FOR A TOTAL OF 20 MARKS. Florence Textiles is an Italian corporation that sells a variety of fabrics. Its US subsidiary, Yankee Denim, operates solely in the US. Yankee Denim uses the Euro (EUR) as its functional currency. The CFO was asked to explain to the board of directors how exchange rates affect the consolidated financial statements. Inventory purchases and sell-through occurred evenly throughout 2019. Exhibit 6: Yankee Denim Balance Sheet for Fiscal Year Ending 31 December 2019 (USD millions) Cash 135 Accounts receivable 98 Inventory 77 Fixed assets 100 Accumulated depreciation (10) Total assets 400 Accounts payable 77 Long term debt 175 Common stock 100 Retained earnings 48 Total liabilities and shareholder's equity 400 Exhibit 7: Exchange Rates USD/EUR Rate on 31 December 2018 Weighted average rate for inventory purchases in 2019 Rate on 31 December 2019 1.16 1.21 1.18 (3A) After translating Yankee's total assets into the parent company's currency (EUR), calculate the amounts for cash, accounts receivable, and fixed assets less accumulated depreciation reported on Florence Textiles financial statements on 31 December 2019 in millions of EUR. (Show all your workings to receive full credit. Write down your answer accurate to 2 decimal places.) [8 marks] (3B) After translating Yankee's 31 December 2019 balance sheet into the parent company's currency (EUR), calculate the translated value of retained earnings in millions of EUR. (Show all your workings to receive full credit. Write down your answer accurate to 2 decimal places.) [12 marks]