Livingston Company is a wholly owned subsidiary of Rose Corporation. Livingston operates in a foreign country with financial statements recorded in pounds (P), the company’s functional currency. Financial statements for the year 2020 are as follows:
Additional Information ∙ The common stock was issued in 2013 when the exchange rate was $2.08 per pound; property, plant, and equipment was acquired in 2014 when the rate was $2.00 per pound. ∙ As of January 1, 2020, the retained earnings balance was translated as $396,520. ∙ The U.S. dollar–per-pound exchange rates for 2020 follow:
∙ Inventory was acquired evenly throughout the year. ∙ The December 31, 2019, balance sheet reported a translation adjustment with a debit balance of $85,000. ∙ Dividends were declared on April 1, 2020, and a piece of equipment was sold on September 1, 2020. Assume that the pound is Livingston Company’s functional currency. Translate the 2020 foreign currency financial statements into the parent’s reporting currency, the U.S. dollar.