Diekmann Company, a U.S.-based company, acquired a 100 percent interest in Rakona A.S. in the Czech Republic on January 1, 2019, when the exchange rate for the Czech koruna (Ks) was $0.05. Rakonas financial statements as of December 31, 2020, two years later, follow:

Balance Sheet December 31, 2020
Assets
Cash	Ks	2,000,000
Accounts receivable (net)		3,300,000
Inventory		8,500,000
Equipment		25,000,000
Less: Accumulated depreciation		(8,500,000	)
Buildings		72,000,000
Less: Accumulated depreciation		(30,300,000	)
Land		6,000,000
Total assets	Ks	78,000,000
Liabilities and Stockholders Equity
Accounts payable	Ks	2,500,000
Long-term debt		50,000,000
Common stock		5,000,000
Additional paid-in capital		15,000,000
Retained earnings		5,500,000
Total liabilities and stockholders equity	Ks	78,000,000

Income Statement For Year Ending December 31, 2020
Sales	Ks	25,000,000
Cost of goods sold		(12,000,000	)
Depreciation expenseequipment		(2,500,000	)
Depreciation expensebuildings		(1,800,000	)
Research and development expense		(1,200,000	)
Other expenses (including taxes)		(1,000,000	)
Net income	Ks	6,500,000
Plus: Retained earnings, 1/1/20		500,000
Less: Dividends, 2020		(1,500,000	)
Retained earnings, 12/31/20	Ks	5,500,000

Additional Information

• The January 1, 2020, beginning inventory of Ks 6,000,000 was acquired on December 18, 2019, when the exchange rate was $0.043. Purchases of inventory were acquired uniformly during 2020. The December 31, 2020, ending inventory of Ks 8,500,000 was acquired in the latter part of 2020 when the exchange rate was $0.032. All depreciable assets (equipment and buildings) were on the books when the subsidiary was acquiredexcept for Ks 5,000,000 of equipment acquired on January 3, 2020, when the exchange rate was $0.036, and Ks 12,000,000 in buildings acquired on March 5, 2020, when the exchange rate was $0.034. Straight-line depreciation is 10 years for equipment and 40 years for buildings. A full years depreciation is taken in the year of acquisition.

• Dividends were declared and paid on December 15, 2020, when the exchange rate was $0.031.

• Other exchange rates for 1 Ks follow:

January 1, 2020	$	0.040
Average 2020		0.035
December 31, 2020		0.030

Translate the Czech koruna financial statements at December 31, 2020, in the following three situations:

1. The Czech koruna is the functional currency. The December 31, 2019, U.S. dollartranslated balance sheet reported retained earnings of $22,500. The December 31, 2019, cumulative translation adjustment was negative $202,500 (debit balance).

2. The U.S. dollar is the functional currency. The December 31, 2019, U.S. dollarremeasured balance sheet reported retained earnings (including a 2019 remeasurement gain) of $353,000.

3. The U.S. dollar is the functional currency. Rakona has no long-term debt. Instead, it has common stock of Ks 20,000,000 and additional paid-in capital of Ks 50,000,000. The December 31, 2019, U.S. dollarremeasured balance sheet reported a negative balance in retained earnings of $147,000 (including a 2019 remeasurement loss).