On January 1, 2021, a U Exchange Rates ($/£) Are $$\begin{array} { l r } \text { January 1, 2021 } & \$ 1.25 \\\text { Average for } 2021 & 1.30 \\\text { December 31, 2021 } & 1.35\end{array}$$

On January 1, 2021, a U.S. parent paid £1,500 to acquire a U.K. subsidiary. The £1,000 excess paid over book value was attributed entirely to goodwill. There is goodwill impairment of £60 in 2021. The subsidiary's functional currency is the pound sterling. The parent uses the complete equity method to account for its investment in the subsidiary on its own books. The subsidiary's December 31, 2021 trial balance is below, in pounds:
$$\begin{array} { | l | r | } \hline &? \\\text { December 31, 2021 trial balance } & \text { Dr (Cr) } \\\hline \text { Cash, receivables } & ? 300 \\\hline \text { Inventories, at cost } & 800 \\\hline \text { Plant } \mathbb { L } _ { \text {e equipment } } \text { net } & 2,500 \\\hline \text { Liabilities } & ( 3,000 ) \\\hline \text { Capital stock } & ( 100 ) \\\hline \text { Retained eamings, beginning } & ( 400 ) \\\hline \text { Sales revenue } & ( 4,000 ) \\\hline \text { Cost of goods sold } & 2,800 \\\hline \text { Operating expenses } & \underline { 1,100 } \\\hline & \underline { ?\quad0 } \\\hline\end{array}$$ Exchange rates ($/£) are:
$$\begin{array} { l r } \text { January 1, 2021 } & \$ 1.25 \\\text { Average for } 2021 & 1.30 \\\text { December 31, 2021 } & 1.35\end{array}$$ Required
a. Prepare a schedule calculating the translation gain for 2021.
b. The consolidation working paper at December 31, 2021 follows. Fill in the working paper as necessary to consolidate the trial balances of the parent and its subsidiary.
c. Prepare a consolidated statement of comprehensive income for 2021. $\begin{array}{|l|c|c|c|c|c|}\hline&\text { Parent } & \text { Subsidiary } & & & \text { Consol } \\&\mathrm{Dr}(\mathrm{Cr}) & \mathrm{Dr}(\mathrm{Cr}) & \mathrm{Dr} & \mathrm{Cr} & \mathrm{Dr}(\mathrm{Cr}) \\\hline \text { Cash, receivables } & \$ 800 & \$ 405 \\\hline \text { Inventories, at cost } & 3,500 & 1,080 \\\hline \text { Plant \& equipment, net } & 10,000 & 3,375 \\\hline \text { Goodwill } & - & - \\\hline \text { Investment in subsidiary } & 1,982 & \begin{array}{ll}- \\--\end{array} \\\hline \text { Liabilities } & (14,675) & (4,050) \\\hline \text { Capital stock } & (200) & (125) \\\hline \text { Retained earnings, beg } & (800) & (500) \\\hline \text { Sales revenue } & (8,000) & (5,200) \\\hline \text { Equity in NI of sub } & (52) & - \\\hline \text { Equity in } \mathrm{OCl} \text { of sub } & \text { (55) } & \begin{array}{ll}-- & - \\\end{array} \\\hline \text { Cost of goods sold } & 6,000 & 3,640 \\\hline \text { Operating expenses } & 1,500 & 1,430 \\\hline \mathrm{OCl} & - & (55) \\\hline \text { Total } & \$\quad0 & \$\quad0 \\ \hline\end{array}$