Business, 21.05.2021 01:20 itscheesycheedar

Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2020, by investing capital in the amount of 72,000 pounds. The subsidiary immediately borrowed 148,000 pounds on a five-year note with 10 percent interest payable annually beginning on January 1, 2021. The subsidiary then purchased for 220,000 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, 3,400 pounds was paid for a repair made to the building. The subsidiary transferred a cash dividend of 11,750 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 $ 2.30 = 1 Pound
October 1, 2020 2.35 = 1
December 31, 2020 2.38 = 1
Average for 2020 2.34 = 1
Prepare a statement of cash flows in pounds for Sullivan's Island Company's foreign subsidiary, and then translate this statement into U. S. dollars. (Round your exchange rate answers to 2 decimal places. Amounts to be deducted and cash outflows should be indicated with minus sign.)

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Sullivan's Island Company began operating a subsidiary in a foreign country on January 1, 2020, by i...

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