Sullivan's Island Company began operating a subsidiary in a foreign country on January $1,2024,$ by investing capital in the amount of

$78,000$ pounds. The subsidiary immediately borrowed $185,000$ pounds on a five$-$year note with $7$ percent interest payable annually

beginning on January $1,2025.$ The subsidiary then purchased for $263,000$ 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 $1,2024,$ the subsidiary rented the building for

three years to a group of local attorneys for $8,450$ pounds per month. By year$-$end, rent payments totaling $84,500$ pounds had been

received, and $16,900$ pounds was in accounts receivable. On October $1,2024,3,300$ pounds was paid for a repair made to the

building. The subsidiary transferred a cash dividend of $11,775$ pounds back to Sullivan's Island Company on December $31,2024.$ The

functional currency for the subsidiary is the pound. Currency exchange rates for $1$ pound follow:

January $1,2024$

October $1,2024$

$$2\mathrm{.}90=1$ Pound

December $31,2024$

$2\mathrm{.}95=1$ Pound

$3\mathrm{.}08=1$ Pound

Required:

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.

Complete this question by entering your answers in the tabs below.

Prepare an Income Statement.

Note: Amounts to be deducted should be indicated by a minus sign.