Parent Company established a subsidiary in UK on January 1, 2020. by investing 80.000 pounds cash. The subsidiary immediately borrowed a five-year note of 190.000 pounds, with 8 percent interest payable annually beginning on January 1, 2021. The subsidiary then purchased for 270,000 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 8.500 pounds per month. By year-end, rent payments totaling 85,000 pounds had been received, and 17.000 pounds was in accounts receivable. On October 1, 2020. 3.400 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,750 pounds back to Parent Company on December 31, 2020. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound follow: January 1, 2020 $3.00 = October 1, 2020 3.05 = December 31, 2020 3.08 = Average for 2020 3.04 = 1 Pound 1 1 1 At the end of the year, the Subsidiary reports the foreign currency financial statements (income statement and balance sheet) as follows: Subsidiary Company Income Statement Pounds Rent revenue 102,000 Interest expense (15,200) Depreciation expense (27,000) Repair expense (3.400) Net income 56,400 Subsidiary Company Balance Sheet Pounds Cash 69,850 Accounts receivable 17,000 Building 270,000 Accumulated depreciation (27,000) Total assets 329,850 Interest payable 15,200 Note payable 190,000 Contributed capital 80,000 Retained earnings, 12/31 44,650 Subtotal 329,850 Translation adjustment Total liabilities and equity 329,850 Income Retained Balance Sheet Statement Earnings Prepare a Income Statement. (Amounts to be deduc Parent COMPANY Income Statement For the Year Ended December 31, 2020 Pounds U.S. Dollars Rent revenue interest expense Repair expense Depreciation expense Net income 0 $ 0