Bear Company operates retail stores in Canada and an exporting business in London specializing in buying and selling British tweeds. The London subsidiary sells its products to Canadian customers, buys its inventory primarily in Canadian dollars, and is mainly dependent on its parent company for financing. The subsidiary provided the following financial statements in pounds sterling to the Canadian parent company. BEAR COMPANY, London Branch Statement of Comprehensive Income Year Ended December 31, 20X5 Sales Cost of goods sold Depreciation expense 2,300,000 (1,200,000) (300,000) (300,000) Other expenses Comprehensive income 500,000 BEAR COMPANY, London Branch Statement of Changes in Equity-Partial-Retained Earnings section Year Ended December 31, 20X5 850,000 500,000 Retained earnings-January 1 Comprehensive income for the year Less: Dividends declared and paid, December 31 Retained earnings-December 31 (200,000) 1,150,000 BEAR COMPANY, London Branch Statement of Financial Position December 31, 20X5 Assets Cash and receivables Merchandise inventory Property, plant, and equipment Total 20X5 1,150,000 450,000 3,450,000 5,050,000 20X4 520,000 380,000 3,750,000 4,650,000 Current liabilities Long-term notes payable, due December 31, 20X9 Capital stock Retained earnings Total 700,000 1,200,000 2,000,000 1,150,000 5,050,000 600,000 1,200,000 2,000,000 850,000 4,650,000 Bear Company-London Branch was incorporated on January 1, 1984, at which time an amount of property, plant, and equipment with a present (December 31, 20X5) net book value of 3,000,000 was purchased. Additional equipment was purchased on December 31, 20X4 (20% of depreciation expense relates to this new equipment). The long-term notes were issued to replace financing provided by the parent on January 1, 20X4. Direct exchange rates for the pound sterling are: January 1, 1984 January 1, 1986, January 1, 20X4 Average for quarter 4, 20X4 December 31, 20X4 / January 1, 20X5 December 31, 20X5 Average for 20X5 Average for quarter 4, 20X5 1 = $1.9180 1.8365 1.6000 1.5612 1.5426 1.4730 1.5093 1.4950 The January 1, 20X5, retained earnings balance of the London Branch of the Bear Company correctly translated to Canadian dollars was $1,783,774. The beginning inventory of 380,000 was acquired during the last quarter of 20X4, and the ending inventory was acquired during the last quarter of 20X5. Sales and purchases were made, and other expenses were incurred evenly throughout the year. Required: 1. Using the appropriate method, translate the statement of comprehensive income of Bear Company-London Branch for the year ending December 31, 20X5, into Canadian dollars. 2. Using the appropriate method, translate the statement of changes in equity-partial-retained earnings section of Bear Company-London Branch for the year ending December 31, 20X5, into Canadian dollars. 3. Using the appropriate method, translate the December 31, 20X5, statement of financial position of Bear Company-London Branch into Canadian dollars. Bear Company operates retail stores in Canada and an exporting business in London specializing in buying and selling British tweeds. The London subsidiary sells its products to Canadian customers, buys its inventory primarily in Canadian dollars, and is mainly dependent on its parent company for financing. The subsidiary provided the following financial statements in pounds sterling to the Canadian parent company. BEAR COMPANY, London Branch Statement of Comprehensive Income Year Ended December 31, 20X5 Sales Cost of goods sold Depreciation expense 2,300,000 (1,200,000) (300,000) (300,000) Other expenses Comprehensive income 500,000 BEAR COMPANY, London Branch Statement of Changes in Equity-Partial-Retained Earnings section Year Ended December 31, 20X5 850,000 500,000 Retained earnings-January 1 Comprehensive income for the year Less: Dividends declared and paid, December 31 Retained earnings-December 31 (200,000) 1,150,000 BEAR COMPANY, London Branch Statement of Financial Position December 31, 20X5 Assets Cash and receivables Merchandise inventory Property, plant, and equipment Total 20X5 1,150,000 450,000 3,450,000 5,050,000 20X4 520,000 380,000 3,750,000 4,650,000 Current liabilities Long-term notes payable, due December 31, 20X9 Capital stock Retained earnings Total 700,000 1,200,000 2,000,000 1,150,000 5,050,000 600,000 1,200,000 2,000,000 850,000 4,650,000 Bear Company-London Branch was incorporated on January 1, 1984, at which time an amount of property, plant, and equipment with a present (December 31, 20X5) net book value of 3,000,000 was purchased. Additional equipment was purchased on December 31, 20X4 (20% of depreciation expense relates to this new equipment). The long-term notes were issued to replace financing provided by the parent on January 1, 20X4. Direct exchange rates for the pound sterling are: January 1, 1984 January 1, 1986, January 1, 20X4 Average for quarter 4, 20X4 December 31, 20X4 / January 1, 20X5 December 31, 20X5 Average for 20X5 Average for quarter 4, 20X5 1 = $1.9180 1.8365 1.6000 1.5612 1.5426 1.4730 1.5093 1.4950 The January 1, 20X5, retained earnings balance of the London Branch of the Bear Company correctly translated to Canadian dollars was $1,783,774. The beginning inventory of 380,000 was acquired during the last quarter of 20X4, and the ending inventory was acquired during the last quarter of 20X5. Sales and purchases were made, and other expenses were incurred evenly throughout the year. Required: 1. Using the appropriate method, translate the statement of comprehensive income of Bear Company-London Branch for the year ending December 31, 20X5, into Canadian dollars. 2. Using the appropriate method, translate the statement of changes in equity-partial-retained earnings section of Bear Company-London Branch for the year ending December 31, 20X5, into Canadian dollars. 3. Using the appropriate method, translate the December 31, 20X5, statement of financial position of Bear Company-London Branch into Canadian dollars