Remeasured and Translated Trial Balance On January 2, 2019, Maddox Corporation, head

quartered in the U.S., established a whollyowned subsidiary in Mexico City. An initial investment of

P10,000,000 was made on that date; the exchange rate was $0.05/peso. During 2019, the following cash

transactions occurred at the Mexico City subsidiary. All amounts are in pesos (P).

Facilities costs (January 2; 5-year life) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . P 1,000,000

Purchase of office equipment (April 1; 10-year life) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000

Sales. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000,000

Merchandise purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,000,000

Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000

The exchange rate was $0.06/P in April when the office equipment and P3,000,000 of merchandise were

purchased. Sales, other merchandise purchases, and operating expenses were assumed to have been made

or incurred at an average exchange rate of $0.07/P. At yearend, the exchange rate was $0.08/P and the

ending inventory (FIFO) amounted to P2,000,000, purchased when the exchange rate was $0.07/P. All

depreciation and amortization is straight-line.

Required

a. Prepare the preclosing trial balance for the Mexico City subsidiary as of December 31, 2019, in U.S.

dollars, the subsidiarys functional currency. Show all calculations.

b. Now assume the subsidiarys functional currency is the peso. Prepare the subsidiarys December 31,

2019, preclosing trial balance, in U.S. dollars.