Connor Inc. acquired control over Faxton Limited, a company registered in a foreign country, on January 1, 2015. On this date, Faxton's assets and liabilities were fairly valued. Faxton was incorporated on January 1, 2012.

 

Notes:

  

By December 31, 2019, Faxton had the following selected items in its financial statements: IN EURO 4,200,000 83,333 330,000 1,250,000 366,666 Cost of Goods Sold (note 1) Amortization Expense - Equipment Inventory Equipment at Cost (note 2) Accumulated Amortization - Equipment Net Income for 2019 Dividends Paid (note 3) Retained Earnings at December 31, 2018 Common Stock (note 4) 200,000 100,000 250,000 1,000,000 1. Faxton s inventory at the end of each year is purchased evenly through the last quarter of the year. Purchases of inventory of EURO 4,000,000 were made evenly through the year. Inventory at December 31, 2018 was EURO 530,000. 2. All equipment has a 15-year life, no residual value and amortized on a straight-line basis. Equipment was purchased as follows: January 1, 2012 January 1, 2018 EURO 500,000 EURO 750,000 EURO 1,250,000 3. Dividends were declared and paid on December 1, 2019 4. There has been no change in common shares outstanding since incorporation. Applicable exchange rates are: January 1, 2012 January 1, 2015 January 1, 2018 December 31, 2018 Average 4th quarter 2018 December 1, 2019 December 31, 2019 Average for year 2019 Average for 4th quarter 2019 EURO = $1.00 EURO = $0.85 EURO = $0.80 EURO = $0.75 EURO = $0.76 EURO = $0.71 EURO = $0.68 EURO = $0.72 EURO = $0.70 c) Translate the following items on Faxton s financial statements for the year ended December 31, 2019 into Canadian dollars, assuming Faxton is an integrated operation and uses the functional currency translation method (FCT). (7 marks) i. Cost of Goods Sold ii. Equipment iii. Accumulated Amortization - Equipment