Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2020, by investing capital in the amount of 74,000 pounds. The subsidiary immediately borrowed 175,000 pounds on a five-year note with 5 percent interest payable annually beginning on January 1, 2021. The subsidiary then purchased for 249,000 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, 2020, the subsidiary rented the building for three years to a group of local attorneys for 8,350 pounds per month. By year-end, rent payments totaling 83,500 pounds had been received, and 16,700 pounds was in accounts receivable. On October 1, 2020, 3,100 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,825 pounds back to Sullivan's Island Company on December 31, 2020. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound follow:

January 1, 2020	$	2.70	=	1 Pound
October 1, 2020		2.75	=	1
December 31, 2020		2.88	=	1
Average for 2020		2.78	=	1

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.

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, 2020
	Pounds	U.S. Dollars
	0	$0

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, 2020
	Pounds	U.S. Dollars
Retained earnings, 1/1
Retained earnings, 12/31	0	$0

Prepare a Balance Sheet. (Amounts to be deducted should be indicated by a minus sign.)

SULLIVAN'S ISLAND COMPANY
Balance Sheet
December 31, 2020
	Pounds	U.S. Dollars
Assets:
Total assets	0	$0
Liabilities and Equities:
Total liabilities and equities	0	$0