Twinkle, Inc. began operating a subsidiary in a foreign country on January $1,2022$ by acquiring all of the common stock for

$300,000$ candy canes, the local currency. This subsidiary immediately borrowed $100,000$ candy canes on a ten$-$year note with $5$

percent interest payable annually beginning on January $1,2023.$ A building was then purchased for $250,000$ candy canes on

January $1,2022.$ This property had a $20$ year anticipated life and no salvage value and was to be depreciated using the straight$-$

line method. The building was immediately rented for $10$ years to a group of local toymakers for $10,000$ candy canes per month.

By year$-$end, payments totaling $100,000$ candy canes had been received. On July $1,202225,000$ candy canes were paid for a

repair made on that date and it was the only transaction of this kind for the year. A cash dividend of $5,000$ candy canes was

transferred back to Twinkle, Inc. on December $31,2022.$ The functional currency for the subsidiary was the candy cane.

Currency exchange rates were as follows:

January $1,20221$ candy cane $=$ $$0\mathrm{.}85$

July $1,20221$ candy cane $=$ $$0\mathrm{.}80$

Average for $20221$ candy cane $=$ $$0\mathrm{.}87$

December $31,20221$ candy cane $=$ $$0\mathrm{.}90$

Prepare an income statement, statement of retained earnings, balance sheet, and statement of cash flows for this subsidiary in

candy canes and then translate these amounts into U$.$S$.$ dollars. Show calculation for translation adjustment.