Translation of financial statements Assume that your company owns a subsidiary operating in Mexico. The subsidiary maintains its books in the Mexican Peso as its functional currency. The subsidiary's financial statements (in Pesos) for the most recent year follow in part a. below: The relevant exchange rates (S:Peso) are as follows: BOY rate EOY rate Avg. rate PPE purchase date rate LTD borrowing date rate Dividend rate $0.080 $0.090 $0.085 $0.086 $0.089 $0.087 Historical rate (common stock and APIC) $0.060 For both parts a. and b. below, use a negative sign with answers to indicate a reduction. a. Translate the subsidiary's income statement, statement of retained earnings, balance sheet, and statement of cash flows into SUS using the current-rate method (assume that the BOY Retained Earnings is $71,503). Round all answers in the "in US Dollars" column to the nearest dollar. Income Statement: Sales Cost of goods sold Gross profit Operating expenses Net income Statement of Retained Earnings: BOY ret. earnings Net income Dividends EOY ret. earnings In Pesos 1,950,000 Translation Rate In US Dollars 0 $ 0 (1,170,000) 0 0 780,000 0 (507,000) D 0 $273,000 $ 0 $1,023,750 $ 0 273,000 0 (27,300) 0 0 $1,269,450 $ 0 Balance Sheet: Assets Cash $554,970 0 $ 0 Accounts receivable 452,400 0 0 Inventory 581,100 0 0 Property, plant, and equipment (PPE), net 1,074,840 0 0 Total assets $2,663,310 $ 0 Liabilities and stockholders' equity Current liabilities L-T liabilities Common stock APIC $330,720 0 $ 0 770,640 0 0 130,000 0 0 162,500 0 0 Ret. earnings 1,269,450 0 0 Total liabilities and equity $2,663,310 $ 0 Statement of Cash Flows: Net income $273,000 0 $ 0 Change in accounts receivable (75,400) 0 0 Change in inventories (96,850) 0 0 Change in current liabilities 55,120 0 0 Net cash from operating activities 155,870 0 Change in PPE, net (99,840) 0 0 Net cash from investing activities (99,840) 0 Change in long-term debt 128,440 0 0 Dividends (27,300) 0 0 Net cash from financing activities 101,140 0 Net change in cash 157,170 0 0 Beginning cash Ending cash 397,800 $554,970 0 0 $ 0 b. Compute the ending Cumulative Translation Adjustment directly, assuming a BOY balance of $16,246. Round the BOY net assets to reconcile the cumulative translation adjustment. Round all answers to the nearest dollar. Direct computation of translation adjustment: $ 0 Net income x (EOY - Average exchange rate) 0 0 0 0 EOY cumulative translation adjustment 0