The following is the balance sheet and income statement of DEF Company, a subsidiary of BOX company. DEF Company is operating in the USA. The accounting records are maintained in Japanese Yen. Most of DEF transaction involves US Dollar. BOX Company, the parent, is registered in SEC in Taiwan. Mar-31 41.5 Sep-18 42 Dec 31 41.75 Average for July - December Average for last quarter 41.88 42.3 41.4 The following is the translated unadjusted balance sheet of DEF Company Assets Cash Trade and Other Receivables Inventories Prepaid Assets Total Current Assets 200,000.00 9,465,457.00 839,433.00 84,844.00 10,589,734.00 The accountant translated the balance sheet by using the closing rate method. Upon consolidation the following were found out: The remaining inventary was purchased on Sept 18. One third of it was measured at market value while the remaining were measured at cost. Quarter of the Prepaid Assets is prepaid interest. The remaining were, prepaid rent paid on January. The term of rent is 3 years. The company's policy on depreciation is to depreciate PPE using straight line method. Land is carried at fair value while machinery and equipment is carried at cost. Machinery is bought 3 years ago at exchange rate of 39.00. Useful life of any PPE account is always 10 years with no salvage value Equipment is bought this year on March 31. Land Building Machinery Equipment Total Non-current Assets 159,000.00 456, 123.00 189.156.00 159.846.00 964,125.00 The company was acquired December 31 four years ago with closing rate of 43.00 Net income for the year is condensed as follows: Total Assets 11,553,859.00 5,000,000.00 Liabilities and Equity Accounts Payable Notes Payable Total Liabilities 89559 123456 213015 Sales Cost of goods sold Inventory, beginning Purchases Total Goods Avail for sale Less: Inventory Endine Grass Profit 1,550,000.00 650,000.00 2,200,000.00 839,433.00 1,360,567.00 3,639,433.00 Equity Common Stock, $i par Retained Earnings Total Equity 60,000 691110 751,110 Expenses including depreciation Net Income 3448323 191,110.00 Requirement Reconstruct the Financial statement of DEF Company. Total Liabilities and and Equity 964,125 The pertinent exchange rates during the year were as follows: Jan-01 This year 40 Last year 42 Average for the year 40.88 The following is the balance sheet and income statement of DEF Company, a subsidiary of BOX company. DEF Company is operating in the USA. The accounting records are maintained in Japanese Yen. Most of DEF transaction involves US Dollar. BOX Company, the parent, is registered in SEC in Taiwan. Mar-31 41.5 Sep-18 42 Dec 31 41.75 Average for July - December Average for last quarter 41.88 42.3 41.4 The following is the translated unadjusted balance sheet of DEF Company Assets Cash Trade and Other Receivables Inventories Prepaid Assets Total Current Assets 200,000.00 9,465,457.00 839,433.00 84,844.00 10,589,734.00 The accountant translated the balance sheet by using the closing rate method. Upon consolidation the following were found out: The remaining inventary was purchased on Sept 18. One third of it was measured at market value while the remaining were measured at cost. Quarter of the Prepaid Assets is prepaid interest. The remaining were, prepaid rent paid on January. The term of rent is 3 years. The company's policy on depreciation is to depreciate PPE using straight line method. Land is carried at fair value while machinery and equipment is carried at cost. Machinery is bought 3 years ago at exchange rate of 39.00. Useful life of any PPE account is always 10 years with no salvage value Equipment is bought this year on March 31. Land Building Machinery Equipment Total Non-current Assets 159,000.00 456, 123.00 189.156.00 159.846.00 964,125.00 The company was acquired December 31 four years ago with closing rate of 43.00 Net income for the year is condensed as follows: Total Assets 11,553,859.00 5,000,000.00 Liabilities and Equity Accounts Payable Notes Payable Total Liabilities 89559 123456 213015 Sales Cost of goods sold Inventory, beginning Purchases Total Goods Avail for sale Less: Inventory Endine Grass Profit 1,550,000.00 650,000.00 2,200,000.00 839,433.00 1,360,567.00 3,639,433.00 Equity Common Stock, $i par Retained Earnings Total Equity 60,000 691110 751,110 Expenses including depreciation Net Income 3448323 191,110.00 Requirement Reconstruct the Financial statement of DEF Company. Total Liabilities and and Equity 964,125 The pertinent exchange rates during the year were as follows: Jan-01 This year 40 Last year 42 Average for the year 40.88