The Polka Corporation, a U.S. corporation, purchases a British subsidiary on January 1, 2011 by investing $880,000 in exchange for all of the subsidiary's no-par common stock. The British subsidiary, Stripe Corporation, purchased property on April 1, 2011 at a cost of 500,000, with 100,000 allocated to land and 400,000 allocated to the building. The U.S. dollar is Stripe's functional currency, but it keeps its records in pounds. Cost of goods sold of 100,000 pounds consists of 125,000 pounds of inventory on hand at acquisition plus 25,000 pounds of purchases made during the year. The British economy experiences low inflation.

Exchange rates for the pound on various dates are:

January 01, 2011 1 = $1.60

April 01, 2011 1 = $1.62

December 31, 2011 1 = $1.65

2011 average rate 1 = $1.64

Rate for dividends 1 = $1.65

Rate for ending inventory 1 = $1.64

Stripe's adjusted trial balance is presented below for the year ended December 31, 2011.

Debits: In Pounds

Cash 200,000

Accounts receivable 50,000

Notes receivable 49,000

Inventory 50,000

Building 400,000

Land 100,000

Depreciation expense 7,500

Other expenses 115,000

Salary expense 108,000

Cost of goods sold 100,000

Dividends 22,000

Total debits 1,201,500

Credits:

Accumulated depreciation 7,500

Accounts payable 100,000

Common stock 300,000

Retained earnings 250,000

Sales revenue 544,000

Total credits 1,201,500

1) Remeasurement working papers;

2) Remeasured income statement (including changes in retained earnings); and

3) Remeasured balance sheet.