Michigan-based Leo Corporation acquired 100 percent of the common stock of a British company on January 1, 2008, for $1,100,000. The British subsidiary's net assets amounted to500,000 pounds on the date of acquisition. On January 1, 2008, the book values of its identifiable assets and liabilities approximated their fair values. As a result of an analysis of functional currency indicators, Leo determined that the British pound was the functional currency. On December 31, 2008, the British subsidiary's adjusted trial balance, translated into U.S. dollars, contained $17,000 more debits than credits. The British subsidiary reported income of 33,000 pounds for 2008 and paid a cash dividend of 8,000 pounds on October 25,2008. Included on the British subsidiary's income statement was depreciation expense of 3,500 pounds. Leo uses the basic equity method of accounting for its investment in the British subsidiary and determined that goodwill in the first year had an impairment loss of 25 percent of its initial amount. Exchange rates at various dates during 2008 follow:
jan 1 1E= $2.10
Oct 25 1E=2.25
Dec 31 1E= 2.20
average for 2008 1e= 2.21
Based on the preceding information, what amount should Leo record as "income from subsidiary" based on the British subsidiary's reported net income?
A.$72,930
B.$52,500
C.$72,600
D.$69,300
A. 72,930