Translation of financial statements and consolidation of a foreign subsidiary (no amortization of AAP) Assume that your company owns a subsidiary operating in Great Britain. The subsidiary maintains its books in the British pound (GBP) as its functional currency. Following are the subsidiarys financial statements (in GBP) for the most recent year:

	(in GBP)			(in GBP)			(in GBP)
Income Statement:			Balance Sheet:			Statement of Cash Flows:
Sales	2,730,000		Assets			Net Income	382,200
Cost of Goods Sold	(1,638,000)		Cash	776,958		Change in accounts receivable	(105,560)
Gross profit	1,092,000		Accounts receivable	633,360		Change in inventories	(135,590)
Operating expenses	(709,800)		Inventory	813,540		Change in current liabilities	77,168
Net income	382,200		Property, plant, and			Net cash from operating activities	218,218
			equipment (PPE), net	1,504,776
			Total assets	3,728,634
Statement of retained earnings:						Change in PPE, net	(139,776)
BOY ret. earnings	1,433,250		Liabilities and stockholders equity			Net cash from investing activities	(139,776)
Net income	382,200		Curr. liabilities	463,008
Dividends	(38,220)		L-T liabilities	1,078,896		Change in long-term debt	179,816
EOY ret. earnings	1,777,230		Common stock	182,000		Dividends	(38,220)
			APIC	227,500		Net cash from financing activities	141,596
			Ret. earnings	1,777,230
			Total liabilities and equity	3,728,634		Net change in cash	220,038
						Beginning cash	556,920
						Ending cash	776,958

The relevant exchange rates for the $US value of the British pound (GBP) are as follows:

BOY rate	$1.50
EOY rate	$1.57
Avg. rate	$1.53
PPE purchase date rate	$1.54
LTD borrowing date rate	$1.54
Dividend rate	$1.55
Historical rate (common stock and APIC)	$0.60

c continued. Assume the following information: The purchase price for the subsidiary included an AAP asset relating to Land that the parent estimated was worth GBP200,000 more than its book value on the subsidiarys balance sheet. Confirm the balance of the Equity Investment account of $3,747,165 on the parents balance sheet.

Equity Investment
BOY Common stock	Answer	Answer
BOY APIC	Answer	Answer
BOY Retained earnings	Answer	Answer
BOY AAP	Answer	Answer
BOY Cumulative translation adjustment	Answer	Answer
Equity income	Answer	Answer	Dividends
Current translation adjustment	Answer	Answer
AAP Translation adjustment (AOCI)	Answer	Answer
Balance	Answer