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Sullivan's Island Company began operating a subsidiary in a foreign country on January 1 , 2 0 2 0 , by investing capital in the
Sullivan's Island Company began operating a subsidiary in a foreign country on January by investing capital in the amount of pounds. The subsidiary immediately borrowed pounds on a fiveyear note with percent interest payable annually beginning on January The subsidiary then purchased for pounds a building that had a year expected life and no salvage value and is to be depreciated using the straightline method. Also on January the subsidiary rented the building for three years to a group of local attorneys for pounds per month. By yearend, rent payments totaling pounds had been received, and pounds was in accounts receivable. On October pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of pounds back to Sullivan's Island Company on December The functional currency for the subsidiary is the pound. Currency exchange rates for pound follow:
January
October
$ Pound
December
Average for
Prepare a statement of cash flows in pounds for Sullivan's Island Company's foreign subsidiary, and then translate this statement into US dollars. Round your exchange rate answers to decimal places. Amounts to be deducted and cash outflows should be indicated with minus sign.
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