Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2020, by investing capital in the amount of 76,000 pounds. The subsidiary immediately borrowed 180,000 pounds on a five-year note with 6 percent interest payable annually beginning on January 1, 2021. The subsidiary then purchased for 256,000 pounds a building that had a 10-year expected life and no salvage value and is to be depreciated using the straight-line method. Also on January 1, 2020, the subsidiary rented the building for three years to a group of local attorneys for 8,400 pounds per month. By year-end, rent payments totaling 84,000 pounds had been received, and 16,800 pounds was in accounts receivable. On October 1, 2020, 3,200 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,800 pounds back to Sullivan's Island Company on December 31, 2020. The functional currency for the subsidiary is the pound. Currency exchange rates for 1 pound follow: January 1, 2020 $ 2.80 = 1 Pound October 1, 2020 2.85 = 1 December 31, 2020 2.88 = 1 Average for 2020 2.84 = 1 Prepare an income statement, statement of retained earnings, and balance sheet for this subsidiary in pounds and then translate these amounts into U.S. dollars.
Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2020, by investing capital in the amount of 76,000 pounds. The subsidiary immediately borrowed 180,000 pounds on a five-year note with 6 percent interest payable annually beginning on January 1, 2021. The subsidiary then purchased for 256,000 pounds a building that had a 10-year expected life and no salvage value and is to be
| January 1, 2020 | $ | 2.80 | = | 1 Pound |
| October 1, 2020 | 2.85 | = | 1 | |
| December 31, 2020 | 2.88 | = | 1 | |
| Average for 2020 | 2.84 | = | 1 | |
Prepare an income statement, statement of
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