Ginvold Co. began operating a subsidiary in a foreign country on January 1, 2011 by acquiring all of the common stock for §50,000 stickles, the local currency. This subsidiary immediately borrowed §120,000 on a 5-year note with 10% interest payable annually beginning on January 1, 2012. A building was then purchased for §170,000 on January 1, 2011. This property had a 10-year anticipated life and no salvage value and was to be depreciated using the straight-line method. The building was immediately rented for 3 years to a group of local doctors for §6,000 per month. By year-end, payments totaling §60,000 had been received.
On October 1, §5,000 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 §6,000 was transferred back to Ginvold at December 31, 2011.
The functional currency for the subsidiary was the stickle (§). Currency exchange rates were as follows:
| January 1, 2011 |
§1 = $2.40 |
| October 1, 2011 |
§1 = $2.22 |
| December 31, 2011 |
§1 = $2.16 |
| Average for 2011 |
§1 = $2.28 |
Required:
(A) Prepare an income statement for this subsidiary in stickles.
(B) Translate these amounts into U.S. dollars.