Translation of financial statements and consolidation of a foreign subsidiary (amortization of AAP) Assume that your company owns a subsidiary operating in Brazil. The subsidiary maintains its books in the Brazilian real (BRL) as its functional currency. Following are the subsidiarys financial statements (in BRL) for the most recent year:

						(in BRL)									(in BRL)									(in BRL)
Income statement									Balance sheet									Statement of cash flows
Sales						6,510,000			Assets									Net income						911,400
Cost of goods sold						(3,906,000)			Cash						1,852,746			Change in accounts receivable						(251,720)
Gross profit						2,604,000			Accounts receivable						1,510,320			Change in inventories						(323,330)
Operating expenses						(1,692,600)			Inventory						1,939,980			Change in current liabilities						184,016
Net income						911,400			Property, plant, and equipment, net						3,588,312			Net cash from operating activities						520,366
															8,891,358
Statement of retained earnings									Liabilities and stockholders' equity
BOY retained earnings						3,417,750			Current liabilities						1,104,096			Change in PPE, net						(333,312)
Net income						911,400			Long-term liabilities						2,572,752			Net cash from investing activities						(333,312)
Dividends						(91,140)			Common stock						434,000
Ending retained earnings						4,238,010			APIC						542,500			Change in long-term debt						428,792
									Retained earnings						4,238,010			Dividends						(91,140)
															8,891,358			Net cash from financing activities						337,652
																		Net change in cash						524,706
																		Beginning cash						1,328,040
																		Ending cash						1,852,746

The relevant exchange rates for the $US value of the Brazilian real (BRL) are as follows:

BOY rate	$0.22
EOY rate	$0.29
Avg. rate	$0.25
PPE purchase date rate	$0.26
LTD borrowing date rate	$0.26
Dividend rate	$0.27
Historical rate (common stock and APIC)	$0.10

Round answers to the nearest dollar. Use rounded answers for subsequent calculations. Use negative signs with answers that are reductions (COGS, expenses, dividends, cash outflows, losses, etc.).

a. Translate the subsidiarys income statement, statement of retained earnings, balance sheet, and statement of cash flows into $US (assume that the BOY Retained Earnings is $649,373).

Use a negative sign with your answers in the "Subsidiary (in $)" column if corresponding figure in the "Subsidiary (in R$)" is shown in parenthesis. (Examples: Cost of goods sold, Operating expenses, Dividends and Changes in accounts in the Statement of Cash Flows)

	Subsidiary (in R$)	Translation Rate	Subsidiary (in $)
Income statement
Sales	6,510,000	$Answer	$Answer
Cost of goods sold	(3,906,000)	$Answer	Answer
Gross profit	2,604,000		Answer
Operating expenses	(1,692,600)	$Answer	Answer
Net income	911,400		$Answer
Statement of retained earnings
BOY retained earnings	3,417,750		$649,373
Net income	911,400		Answer
Dividends	(91,140)	$Answer	Answer
Ending retained earnings	4,238,010		$Answer
Balance sheet
Assets
Cash	1,852,746	$Answer	$Answer
Accounts receivable	1,510,320	$Answer	Answer
Inventory	1,939,980	$Answer	Answer
Property, plant, and equipment, net	3,588,312	$Answer	Answer
	8,891,358		$AnswerMark 0.00 out of 1.00