A U.S. parent owns all of the stock of an Italian subsidiary. The subsidiary's January 1 and December 31, 2023 trial balances are as follows, in euros:
December 31, 2023 January 1, 2023
Dr (Cr) Dr (Cr)
Cash, receivables €180,000 €200,000
Inventories, at FIFO cost 500,000 400,000
Plant & equipment, net 1,300,000 1,600,000
Liabilities (1,080,000) (1,400,000)
Capital stock (200,000) (200,000)
Retained earnings, beginning (600,000) (600,000)
Dividends 100,000
Sales revenue (4,000,000)
Cost of goods sold 2,300,000
Depreciation expense 300,000
Out of pocket expenses 1,200,000
€0 €0
Sales, purchases, and recurring out of pocket expenses occurred evenly throughout the year. Exchange rates($/€) are:
January 1, 2023 $1.15
Average for 2023 $1.20
Rate when dividends declared $1.22
December 31, 2023 $1.25