for all of Gioco's identifiable assets and liabilities. Selected account balances from Gioco's general ledger on December 31, Year 2, were as follows: Gioco purchased the building and equipment on January 1, Year 1. The condensed trial balance of Gioco for the year ending December 31, Year 5, was as follows: On December 31, Year 2, PAT Inc. of Halifax acquired 90% of the voting shares of Gioco Limited of Italy, for 690,000 euros (). On the acquisition date, the fair values equalled the carrying amounts (a) Translate into Canadian dollars the following items on Gioco's financial statements for the year ended December 31, Year 5, assuming that Gioco's functional currency is the Canadian dollar: (i) Accounts receivable (ii) Inventory (iii) Equipment (iv) Accumulated amortization (v) Common shares (b) Translate into Canadian dollars the following items on Gioco's financial statements for the year ended December 31, Year 5, assuming that Gioco's functional currency is the euro: (i) Cost of goods purchased (ii) Amortization expense (iii) Inventory (iv) Common shares (c) For Gioco, which functional currency would show the strongest current ratio for the company's translated financial statements? Briefly explain. (d) Prepare an independent calculation of the unrealized exchange gains or losses to be included in other comprehensive income for Year 5 , assuming that Gioco's functional currency is the euro. - Gioco's sales, inventory purchases, and other expenses occurred uniformly over the year. - Gioco's inventory on hand at the end of each year was purchased uniformly over the last quarter. On December 31, Year 4, the inventories totalled 375,000, and on December 31, Year 5 , they totalled 255,000. - On January 1, Year 5, Gioco purchased equipment for 200,000. The equipment has an estimated useful life of eight years and a residual value of 5,000. Gioco uses the double-declining-balance method to calculate amortization expense. There were no other purchases of property, plant, and equipment between Year 2 and Year 5. - The dividends were declared and paid on January 1, Year 5. - The exchange rates for the euro and the Canadian dollar were as follows: Jan. 1, Year 1 Dec. 31, Year 2 Average for the Year 4 fourth quarter Dec. 31, Year 4/Jan. 1, Year 5 Dec. 31, Year 5 Average for Year 5 $1=0.50$1=f0.60$1=60.68$1=60.70$1=60.80$1=60.76$1=60.79