Translation of financial statements (2 years) Assume that your company owns a subsidiary operating in Australia. The subsidiary maintains its books in the Australian Dollar (AUD) as its functional currency. Following are the subsidiarys financial statements (in AUD) for the prior and most recent years:

(in AUD)	Prior Year	Current Year
Income statement:
Sales	7,875,000	9,450,000
Cost of goods sold	(4,725,000)	(5,670,000)
Gross profit	3,150,000	3,780,000
Operating expenses	(2,047,500)	(2,457,000)
Net income	1,102,500	1,323,000
Statement of retained earnings
BOY retained earnings	3,969,000	4,961,250
Net income	1,102,500	1,323,000
Dividends	(110,250)	(132,300)
Ending retained earnings	4,961,250	6,151,950
Balance sheet:
Assets
Cash	1,002,960	2,689,470
Accounts receivable	1,827,000	2,192,400
Inventory	2,346,750	2,816,100
Property, plant & equipment, net	5,649,840	5,208,840
Total assets	10,826,550	12,906,810
Liabilities and stockholders' equity
Current liabilities	1,335,600	1,602,720
Long-term liabilities	3,112,200	3,734,640
Common stock	630,000	630,000
APIC	787,500	787,500
Retained earnings	4,961,250	6,151,950
Total liabilities and equity	10,826,550	12,906,810
(in AUD)		Current Year
Statement of cash flows:
Net income		1,323,000
Change in accounts receivable		(365,400)
Change in inventories		(469,350)
Change in current liabilities		267,120
Net cash flows from operating activities		755,370
Change in PPE, net		441,000
Net cash flows from investing activities		441,000
Change in long-term debt		622,440
Dividends		(132,300)
Net cash flows from financing activities		490,140
Net change in cash		1,686,510
Beginning cash		1,002,960
Ending cash		2,689,470

The relevant exchange rates for the $US value of the Australian Dollar (AUD) are as follows:

	Prior Year	Current Year
BOY rate	$0.93	$0.86
EOY rate	$0.86	$0.73
Avg. rate	$0.87	$0.83
PPE purchase date rate		$0.79
LTD borrowing date rate		$0.79
Dividend rate	$0.83	$0.74
Historical rate (common stock and APIC)	$1.05	$1.05

a. Translate the subsidiarys income statement, statement of retained earnings, balance sheet, and statement of cash flows into $US for both years (assume that the BOY Retained Earnings is $803,250 at the beginning of the prior year).