Translation of financial statements (2 years) Assume that your company owns a subsidiary operating in Germany. The subsidiary conducts most of its business activities in the European Economic Union and maintains it books in the Euro as its functional currency. Following are the subsidiary's financial statements (in ) for the prior and most recent years: The relevant exchange rates for the $US value of the Euro () are as follows: Prior Year Current Year $1.29 $1.21 $1.21 $1.25 BOY rate EOY rate Avg. rate PPE purchase date rate LTD borrowing date rate Dividend rate $1.22 Historical rate (common stock and APIC) $1.41 a. Translate the subsidiary's income statement, statement of retained earnings, and balance sheet into $US for both years (assume that the BOY Retained Earnings for the prior year is $1,170,000). Instructions: . Round translated answers to the nearest whole number. Use negative signs with answers that are reductions (COGS, expenses, dividends, cash outflows, losses, etc.). Prior Year Income Statement: S

Transtation of financial statements (2 years) currency Following we the sibsidarys financial statements in ofor the prior and mostrecent yeuc: The relevant ecchanse rates for the sus value of the Euro io are as follows: instructions: - Flound tranatused anuwers to the neurest whole number. Prior Year Current Year \begin{tabular}{|c|c|c|c|c|} \hline \multirow[b]{2}{*}{ Income Statement: } & \multicolumn{4}{|c|}{ Translation } \\ \hline & (ln) & & tate & (In \$) \\ \hline Sales & 5,850,000 & $ & 1.18 & \$ 6,903,000 \\ \hline Cost of goods sold & (3,510,000) & 5 & 1.18 & (4,141,800) \\ \hline Gross profit & 2,340,000 & & & 2,761,200 \\ \hline Operating expenses & (1,521,000) & $ & 1.18 & (1,794,780) \\ \hline Net income : & 819,000 & . & & $966,420 \\ \hline \multicolumn{5}{|l|}{ Statement of retained earnings: } \\ \hline BOY retained earnings & 3,071,100 & & & \$ 1,939,677 \\ \hline Net income & 819,000 & & & 966,420 \\ \hline Dividends & (81,900) & $ & 1.16 & (95,004) \\ \hline Ending retained earnings & 3,808,200 & & & $2,811,093 \\ \hline \multicolumn{5}{|l|}{ Balance sheet } \\ \hline \multicolumn{5}{|l|}{ Assets } \\ \hline Cash & 1,664,700 & $ & 1.15 & \$ 1,914,405 \\ \hline Accounts receivable & 1,357,200 & $ & 1.15 & 1,560,780 \\ \hline Inventory & 1,743,300 & $ & 1.15 & 2,004,795 \\ \hline PPE, net & 3,224,500 & $ & 1.15 & 3,708,175 \\ \hline Total assets & 7,989/00 & & & \$ 9,188,155 \\ \hline \multicolumn{5}{|l|}{ Liabilities and stockholders' equity } \\ \hline Current liabilities & 992,100 & $ & 1.155 & \$ 1,140,915 \\ \hline Long-term liabilities & 2,311,900 & $ & 1.15 & 2,658,685 \\ \hline Common stock & 390,000 & $ & 1.41 & 549,900 \\ \hline APIC & 487,500 & $ & 1.41 & 687,375 \\ \hline Retained earnings & 3,808,200 & & & 2,811,093 \\ \hline Cumulative translation adjustment & & & & 0x \\ \hline Total liabilities \& equity & 7,989,700 & & & \$ 7,989,700 \\ \hline Statement of cash flows: & & & & \\ \hline \end{tabular} b. Compute the ending Cumulative Translation Adjustment directly for the current year. Note:Use negative signs with answers, when appropriate