Forha uses FIFO to value its inventory. The inventory at December 31^st, 2015 was purchased November 1^st, 2015. The inventory at December 31^st, 2016 was purchased December 1^st, 2016.

Annual depreciation of FC125,000 is included in the other expenses.

Forha declared and paid dividends on December 31^st, 2016.

Under the functional currency translation method, Forhas retained earnings on December 31^st, 2016 were translated to $342,046 and the accumulated other comprehensive income translated to $87,272.

Exchange rates for this problem equal to $1 CAD:

January 1^st, 2012 FC 1.25

January 1^st, 2015 FC 1.00

November 1^st, 2015 FC 0.97

December 31^st, 2015 FC 0.955

Average for 2015 FC 0.975

December 1^st, 2016 FC 0.90

December 31^st, 2016 FC 0.91

Average for 2016 FC 0.93

Translate Forhas 2016 financial statements into $CAD.

a. assuming Forhas functional currency is is the Canadian dollar.

b. assuming Forhas functional currency is the FC.

I. On January 1st, 2015, Hooper Ltd., a Canadian company, acquired 90% of the common shares of Forha Ltd., a foreign company. Forha was incorporated on January 15t, 2012. Forha's financial statements for 2015 and 2016 are presented below Forha Ltd. Statement of Financial Position (in FC) December 31 2015 2016 Noncurrent assets: Furniture and equipment Accumulated depreciation 1,250,000 1,250,000 625,000 625,000 500,000 750,000 Current assets: 262,500 677,500 637,500 250,000 1190,000 1051,250 1,815,000 1801,250 288,750 Inventory Accounts receivable Cash 125,000 Total assets I. On January 1st, 2015, Hooper Ltd., a Canadian company, acquired 90% of the common shares of Forha Ltd., a foreign company. Forha was incorporated on January 15t, 2012. Forha's financial statements for 2015 and 2016 are presented below Forha Ltd. Statement of Financial Position (in FC) December 31 2015 2016 Noncurrent assets: Furniture and equipment Accumulated depreciation 1,250,000 1,250,000 625,000 625,000 500,000 750,000 Current assets: 262,500 677,500 637,500 250,000 1190,000 1051,250 1,815,000 1801,250 288,750 Inventory Accounts receivable Cash 125,000 Total assets