Translation of financial statements 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. The subsidiary's financial statements (in GBP) for the most recent year follow in part a. below: The relevant exchange rates for the $US value of the British pound (GBP) are as follows: BOY rate $1.40 EOY rate $1.47 $1.43 $1.44 Avg. rate PPE purchase date rate LTD borrowing date rate Dividend rate Historical rate (common stock and APIC) $1.44 $1.45 $1.20 Instructions for both parts a. and b. below: Use a negative sign with your answers to indicate a reduction (expenses, cash outflows, etc.). Round answers to the nearest whole number. b. Compute the ending Cumulative Translation Adjustment directly, assuming a BOY balance of $2,395,692. Direct computation of translation adjustment: BOY net assets x (EOY - BOY exchange rates) - $ 0 Net income x EOY -Avg. Exchange rates 0 Dividends x (EOY - Dividend exchange rate) - 0 2,395,692 BOY cumulative translation adjustment EOY Cumulative Translation Adjustment $ 0 Translation of financial statements 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. The subsidiary's financial statements (in GBP) for the most recent year follow in part a. below: The relevant exchange rates for the $US value of the British pound (GBP) are as follows: BOY rate $1.40 EOY rate $1.47 $1.43 $1.44 Avg. rate PPE purchase date rate LTD borrowing date rate Dividend rate Historical rate (common stock and APIC) $1.44 $1.45 $1.20 Instructions for both parts a. and b. below: Use a negative sign with your answers to indicate a reduction (expenses, cash outflows, etc.). Round answers to the nearest whole number. b. Compute the ending Cumulative Translation Adjustment directly, assuming a BOY balance of $2,395,692. Direct computation of translation adjustment: BOY net assets x (EOY - BOY exchange rates) - $ 0 Net income x EOY -Avg. Exchange rates 0 Dividends x (EOY - Dividend exchange rate) - 0 2,395,692 BOY cumulative translation adjustment EOY Cumulative Translation Adjustment $ 0