Watson Company has a subsidiary in the country of Alonza where the local currency unit is the kamel.

 
   

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Watson Company has a subsidiary in the country of Alonza where the local currency unit is the kamel (KM). On December 31, 2010, the subsidiary has the following balance sheet: The subsidiary acquired the inventory on August 1, 2010, and the land and buildings in 2000. It issued the common stock in 1998. During 2011, the following transactions took place: 2011 Feb. 1 ….. Paid 5,000 KM on the note payable. May 1 ….. Sold entire inventory for 15,000 KM on account. June 1 ….. Sold land for 5,000 KM cash. Aug. 1 ….. Collected all accounts receivable. Sept. 1 ….. Signed long-term note to receive 6,000 KM cash. Oct. 1 ….. Bought inventory for 12,000 KM cash. Nov. 1 ….. Bought land for 4,000 KM on account. Dec. 1 ….. Paid 3,000 KM cash dividend to parent. Dec. 31 ….. Recorded depreciation for the entire year of 2,000 KM. The exchange rates for 1 KM are as follows: 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 KM = $0.24 2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 = 0.21 August 1, 2010 . . . . . . . . . . . . . . . . . . . . . . .1 = 0.31 December 31, 2010 . . . . . . . . . . . . . . . . . . . .1 = 0.32 February 1, 2011 . . . . . . . . . . . . . . . . . . . . . .1 = 0.33 May 1, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . 1 = 0.34 June 1, 2011 . . . . . . . . . . . . . . . . . . . . . . . . . 1 = 0.35 August 1, 2011 . . . . . . . . . . . . . . . . . . . . . . .1 = 0.37 September 1, 20