on December 31, Year 1. Precision Manufacturing Inc. (PMI) of Edmonton purchased 100% of the outstanding ordinary shares of Sandora Corp. of Flint, Michigan Sandora's comparative statement of financial position and Year 2 income statement are as follows: STATEMENT OF FINANCIAL POSITION At December 31 Year 2 Plant and equipment (net) US$ 6, 730,000 Inventory 5,830,000 Accounts receivable 6,230,000 cash 910.000 US$ 19 700.000 Ordinary shares US$ 130,000 Retained earnings 7,610,000 Bonds payable-due Dec. 31, Year 6 4,930, ce Current liabilities 2.038,800 US$ 19, 200,000 Year 1 US$ 7,430,000 6,430,000 4,830,000 1.030,000 US$19,220,000 US$ 5,130,000 7,130,000 4,930,000 2530,000 US$ 19, 220.000 INCOME STATEMENT For the year ended December 31 Year 2 Sales US4 Dec cost of purchases 33, 500, change in inventory see,880 Depreciation expense Der expenses 5,090 be 48 re US$ 2670 Additional Information Exchange rates Exchange rates Dec. 31 Year 1 epe, Year 2 Dec 31, Year 2 Average for Year 2 US$1 01.10 US$1.051.07 US$1 C$1.es US$1. C$1.88 Sandora declared and paid dividends on September 30, Year 2 . The inventories on hand on December 31, Year 2. were purchased when the exchange rate was US$1 C$1.06. Required: (a) Assume that Sandora's functional currency is the Canadian dollar (1) Calculate the Year 2 exchange gain (loss) that would result from the translation of Sandora's financial statements deput all mounts as positive value. Omit currency symbol in your response.) eller to select) C$ (11) Translate the Year 2 financial statements into Canadian dollars (Round the values in the "Rote column to 2 decimal places Exchange gain, if any, should be entered as positive value, and exchange tous. If any should be entered with a minusulananpur all other amounts as positive values. Omlt currency symbol in your response.) Income Statement-Year 2 Rate CS USS 43, 33,50 Sales Costo Adrchaus Chantentory Deprecated Ches Holok ceselect V ZB SH de Nie das Click to select) V 40,230,00 2,670,eee End Retained Earnings Statement Year 2 US Rate Bal. Jan 1 7,130, eee * Profit 2,670, eee 9,8ee, eee Dividends 2,198,eee Bal. Dec 31 7,610, eee es Statement of Financial Position - December 31, Year 2 US$ Rate plant and equipment (net) 5,238, see Inventory 5,830, eee Accounts receivable 6,238,888 Cash 910,000 19,700.000 Ordinary shares 5,138,888 Retained earnings 7.610.de Bonds payable 4,930.000 cuntent liabilities de.ee 19/08, (b) Assume that Sandora's functional currency is the us dolla ( Calcu ate the Year 2 exchange gain lossthat would resurrom the translation of Sandora's financial statements and would be Neported in the comprehensile contingut al amounts as positive value. Omit currency symbol in your response 1 (b) Assume that Sandora's functional currency is the US dollar () Calculate the Year 2 exchange gain (loss) that would result from the translation of Sandora's financial statements and would be reported in other comprehensive income. (Input all amounts as positive value. Omh currency symbol in your response.) Click to select) $ (II) Translate the Year 2 financial statements into Canadian dollars. (Round the values in the Rate column to 2 decimal places Los amounts should be indicated with a minus sign. Input all other amounts os poshlve values. Omit currency symbol in your response.) Income Statement Year 2 US$ Rate Sales cost of purchases Change in inventory Depreciation expense Other expenses Total Profit Other comprehensive Click to selec v Click to selec Follck to select) V 43,000,000 33,54e, eee 600,000 708 Bee 5,490,000 49,330, 2,678, eee - unrealized exchange Retained Earnings Statement. Year 2 US$ Rate Ballen 138. Profit 2,67. eede Didenda Ba2 De Ulvidenos Bal. Dec 31 2, 7,610, eee CH Rate Statement of Financial Position December 31, Year 2 US$ Plant and equipment (net) 6,730,00 Inventory 5,830, een Accounts receivable 6,230, oee Cash 910, we 19,700, eee Ordinary shares 5,130,eee Retained earnings 7,619,00 Accumulated foreign exchange adjustments Bonds payable 4,938,00 Current liabilities 2,039, 19,700, eee aces (c) Which functional currency would Sandora prefer to use if it wants to show the following ( The strongest solvency position for the company Functional currency s Canadian dollar. Functional currency is US dollar and accumulated foreign exchange adjustments (AFEA) are included in equity O Functional currency Is U.S. dollar and accumulated foreign exchange adjustments (AFEA) are excluded from equity ( The best return on shareholders equity