Translation of Foreign Currency Financial Statements 435 36. On January 1, 2016. Cayce Corporation acquired 100 percent of Simbel Company for consideration transferred with a fair value of $126,000. Cayce is a U.S.-based company headquartered in Buf- falo, New York, and Simbel is in Cairo, Egypt. Cayce accounts for its investment in Simbel under the initial value method. Any excess of fair value of consideration transferred over book value is attributable to undervalued land on Simbel's books. Simbel had no retained earnings at the date of acquisition. Following are the 2017 financial statements for the two operations. Information for Cavce and for Simbel is in U.S. dollars (S) and Egyptian pounds (SE), respectively. Cayce Corporation $ 200,000 193.800) 119,000) 17,000) (21,000) 13,750 Sales Cost of goods sold..... Salary expense... . Rent expense . Other expenses Dividend income--from Simbel ........... Gain on sale of building, 10/1/17 Net income Retained earnings. 1/1/17 ......... Net income... Dividends Retained earnings, 12/31/17..... Cash and receivables ............ Inventory.. .. Prepaid expenses Investment in Simbel (initial value) .... Property, plant & equipment (net) ...... Total assets Accounts payable ....... .. Notes payable-due in 2020 ........ Common stock Additional paid-in capital ............. Retained earnings, 12/31/17 ......... Total liabilities and equities ........ Simbel Company LE 800.000 1420.000) 174,000) (46,000 (59.000) -0- 30.000 E 231,000 CE 133.000 231.000 50,000 E 314,000 SE 146,000 297,000 -0- $ 72,950 $318,000 72,950 (24,000 $366,950 $ 110.750 98,000 30.000 126.000 398,000 $ 762.750 $ 60,800 132,000 120.000 83.000 366,950 $762.750 455,000 E 898.000 SE 54.000 140,000 240,000 150,000 314,000 SE 898.000 ...... Additional Information . During 2016, the first year of joint operation. Simbel reported income of SE 163.000 earned evenly throughout the year. Simbel declared a dividend of SE 30,000 to Cayce on June 1 of that year. Simbel also declared the 2017 dividend on June 1. On December 9, 2017. Simbel classified a SE 10.000 expenditure as a rent expense, although this payment related to prepayment of rent for the first few months of 2018 The exchange rates for I SE are as follows: January 1, 2016 June 1, 2016 Weighted average rate for 2016...... December 31, 2017... .......... June 1, 2017 October 1, 2017 Weighted average rate for 2017......... December 31, 2017.. $0.300 0.290 0.288 0.280 0.275 0.273 0.274 0.270 Translate Simbel's 2017 financial statements into U.S. dollars and prepare a consolidation work- sheet for Cayce and its Egyptian subsidiary. Assume that the Egyptian pound is the subsidiary's functional currency