Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2017, by investing capital in the amount of 108,000 pounds. The subsidiary immediately borrowed 260,000 pounds on a five-year note with 10 percent interest payable annually beginning on January 1, 2018. The subsidiary then purchased for 368,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2017, the subsidiary rented the building for three years to a group of local attorneys for 9,200 pounds per month. By year-end, rent payments totaling 92,000 pounds had been received, and 18,400 pounds was in accounts receivable. On October 1, 4,800 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,400 pounds back to Sullivan's Island Company on December 31, 2017. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound follow $2.301 Pound January 1, 2017 october 1, 2017 December 31, 2017 Average for 2017 2.351 2.38 1 2.341 Prepare an income statement, statement of retained earnings, and balance sheet for this subsidiary in pounds and then translate these amounts into U.S. dollars. Retained Earnings Income Statement Balance Sheet Prepare a Income Statement. (Amounts to be deducted should be indicated by a minus sign.) SULLIVAN'S ISLAND COMPANY Income Statement For the Year Ended December 31, 2017 U.S Dollars Pounds 104,400 X $ 244,296 (12,600) (29,484) Rent revenue Interest expense Repair expense Depreciation expense (3,800) (29,800)& (69,73 (8,930) 58,200$136,150 Retained StatementEarnings Income Balance Sheet Prepare a Statement of Retained earnings. (Amounts to be deducted should be indicated by a minus sign.) SULLIVAN'S ISLAND COMPANY Statement of Retained Earnings For the Year Ended December 31, 2017 U.S. Dollars Pounds Retained earnings, 1/1 Net income Dividends declared, 12/31 Retained earnings, 12/31 01 >| 136,150 (27,727) $108,423 58,200 (11,650)C 46,550 Income Statement Retained Earnings Balance Sheet Prepare a Balance Sheet. (Amounts to be deducted should be indicated by a minus sign.) SULLIVAN'S ISLAND COMPANY Balance Sheet December 31, 2017 U.S. Dollars Pounds Assets 71,55031 ,170,289 Cash Accounts receab 17,400 41,412 Building Accumulated depreciation 298,000X 709,240 (29,800)X (70.,924) 57,150 850,017 Total assets Liabilities and Equities: Interest payable Note payable 12,600 X $ 29,988 210,000 499,800 88,000 X 202,400 108,423 (9,406) 57,150 831,205 46,550 Retained earnings Translation adjustment Total liabilities and equities