Following are the financial statements of Malkin Inc., of Russia, as at December 31, Year 11:

FINANCIAL STATEMENTS
BALANCE SHEET
At December 31, Year 11
Cash				RUB	106,000
Accounts receivable					167,000
Inventoriesat cost					357,000
Land					430,000
Buildings		1,460,000
Accumulated depreciation		511,000			949,000
Equipment		483,000
Accumulated depreciation		168,000			315,000
				RUB	2,324,000
Accounts payable				RUB	210,000
Miscellaneous payables					114,000
Bonds payable					500,000
Common shares					850,000
Retained earnings					650,000
				RUB	2,324,000

RETAINED EARNINGS STATEMENT
Balance, January 1				RUB	470,000
Net income					630,000
					1,100,000
Dividends					450,000
Balance, December 31				RUB	650,000

INCOME STATEMENT
Sales				RUB	3,150,000
Cost of sales					1,680,000
Other expenses					840,000
					2,520,000
Net Income				RUB	630,000

Additional Information

• On January 1, Year 11, Crichton Corporation of Toronto acquired 40% of Malkins common shares for RUB800,000.
• Relevant exchange rates for the Russian ruble (RUB) were as follows:

Jan. 1, Year 11	$1 = RUB28.00
Dec. 31, Year 11	$1 = RUB28.02
Average for Year 11	$1 = RUB27.90

• The land and buildings were purchased in Year 5 when the exchange rate was RUB26.50.
• During Year 11, equipment costing RUB125,000 was purchased for cash. Depreciation totalling RUB25,000 has been recorded on this equipment. The exchange rate on the date of the equipment purchase was RUB28.18.

The remaining equipment was purchased in Year 9 when the exchange rate was RUB27.17. No other changes have taken place since that date. Depreciation on the buildings of RUB73,000 and depreciation of RUB63,000 on all the equipment are included in other expenses.

• The December 31, Year 11, inventory was acquired during the last quarter of the year, when the average exchange rate was RUB28.04.
• On January 1, Year 11, the inventory was RUB525,000 and was acquired when the average exchange rate was RUB28.27.
• The bonds were issued on January 1, Year 7 when the exchange rate was RUB26.80 and mature on December 31, Year 16.
• Other operating expenses were incurred equally throughout the year.
• Dividends were declared and paid on December 31, Year 11.
• On January 1, Year 11, liabilities were greater than monetary assets by the amount of RUB910,000.
• The common shares were issued in Year 1 when the exchange rate was RUB25.00.

Required:

(a) Assume that Malkins functional currency is the Canadian dollar. Translate the financial statements into Canadian dollars for purposes of using the equity method to account for the associate. (For the Balance Sheet alone, negative amounts and deductions should be indicated by a minus sign. Round the "Rate" to 2 decimal places and "Dollars" to nearest whole number. Input all the other amounts as positive values. Omit $ sign in your response.)

Income Statement Year 11		RUB		Rate		Dollars
Sales		3,150,000
Cost of sales		1,680,000
Depreciation building		73,000
equipment		63,000
Other expenses		704,000
Exchange gain
		2,520,000
Net income		630,000

Retained Earnings Statement Year 11		RUB		Rate		Dollars
Balance Jan. 1		470,000
Net Income		630,000
		1,100,000
Dividends		450,000
Balance Dec. 31		650,000

Balance Sheet December 31, Year 11		RUB		Rate		Dollars
Cash		106,000
Accounts receivable		167,000
Inventories		357,000
Land		430,000
Buildings		1,460,000
Accumulated depreciation		(511,000)
Equipment		483,000
Accumulated depreciation		(168,000)
		2,324,000
Accounts payable		210,000
Miscellaneous payables		114,000
Bonds payable		500,000
Common shares		850,000
Retained earnings		650,000
		2,324,000

(b) Assume that Malkins functional currency is the Russian ruble. Translate the balance sheet only into Canadian dollars for equity-method purposes. (Negative amounts and deductions should be indicated by a minus sign. Round the "Rate" to 2 decimal places and "Dollars" to nearest whole number. Input all the other amounts as positive values. Omit $ sign in your response.)

Balance Sheet December 31, Year 11		RUB		Rate		Dollars
Cash		106,000
Accounts receivable		167,000
Inventories		357,000
Land		430,000
Buildings		1,460,000
Accumulated depreciation		(511,000)
Equipment		483,000
Accumulated depreciation		(168,000)
		2,324,000
Accounts payable		210,000
Miscellaneous payables		114,000
Bonds payable		500,000
Shareholders' equity
Common shares		850,000
Retained earnings		650,000
Accumulated foreign exchange adjustments (loss)
		2,324,000

(c) This part of the question is not part of your Connect assignment.