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 Plant and equipment (net) US$ 6,730, eee Inventory 5,830,000 Accounts receivable 6,230,000 cash 910,000 US$ 19, 200,000 Ordinary shares US$ 5,13 ga Retained earnings 7,618, Bonds payable-due Dec. 31, Year 6 4,930, see current Habilities 2.630,000 US$ 19, 70e,dea Year 1 USS 2,430, Bee 6,43e, Bee 4,83e, see 1,030,000 US$19,728,888 US$ 5, 136, see 7, 138, Bee 4,938,888 2,538.00 US19720 INCOME STATEMENT For the year ended December 31, Year 2 Sales LISS4, de Bee DOSE of purchases 3,548, Change inventory bee Bee Dreesatiapente 000, Othedenses Seee US2 Additional Information Exchange rate LUL TAU Gallup | Analytics a... Ontano Real Estate Prime Vides Sard US$ 19 zee, e US$ 19 220, 800 INCOME STATEMENT For the year ended December 31, Year 2 Sales US$ 43,000,000 Cost of purchases 33,540,80 Change in inventory 600,000 Depreciation expense 709,90 Other expenses 5,490,000 48330,00 Profit US$ 2.670 Bee Additional Information Exchange rates Dec Year 1 Sepe Year 2 Dec Year 2 Average fon Year 2 US$16 C51.10 US$1. C$1.87 USS C$1.09 US$1. C$1.08 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$106. Required: (b) Assume that Sandora's functional currency is the US dollar (0) Calculate the Year 2 exchange gain (loss) that would result from the translation of Sandora's financial statements and would be reported in other comprehensive income. (Input all amounts as positive value. Omit currency symbol in your response) Click to select) V C$ (11) Translate the Year 2 financial statements into Canadian dollars. (Round the values in the "Rate" column to 2 decimal places. L amounts should be indicated with a minus sign. Input all other amounts as positive values. Omit currency symbol in your response.) Income Statement Year 2 Rate 0 I Sales cost of purchases Change in inventory Depreciation expense Other expenses Total Profit Other comprehensive Click to selec Click to selec Click to select US$ 43,000,aee 33,540,000 608, Bee 790,000 5,498,888 48.338.800 2,678, unrealized exchange Retained Earnings Statement - Year 2 US$ Rate Balan 130,00 PFA Divad Rate Statement Financial Pasto December 1 Year 2 USI plant and equipment (net) 6,730.09 Inventory 5.830, Accounts receivable 6,250,000 Cash 910,000 19,700,000 ordinary shares 5,130,000 Retained earnings 7,610,00 Accumulated foreign exchange adjustments Bonds payable 4,930.000 current liabilities 2,0,000 19,700, (c) Which functional currency would Sandora prefer to use if it wants to show the following? (D) The strongest solvency position for the company Functional currency is Canadian dollar Functional currency is U.S. dollar and accumulated foreign exchange adjustments (AFEA) are included inequity 10 Functional currency is U.S. dollar and accumulated foreign exchange adjustments (AFEA are excluded from equity ku: The best return on shareholders equity Functional currency is Canadian alan Functional currency U.S. dollar and other comprehensive income toch is included in income. Funaronai eu ency is US dollerend en comprehensive Income ace is excluded income. On December 31. Year 1. Precision Manufacturing Inc. (PMI) of Edmonton purchased 100% of the outstanding ordinary share 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, eee Accounts receivable 6, 23e, eee dash 918,888 US$ 19 7ee089 Ordinary shares US$ 5,130,000 Retained earnings 7,610,000 Bonds payable-due Dec. 31, Year 6 4,980,00 Current liabilities 2.ee, Bee US$ 19790,000 Year US$ 7,430, eee 6,438,000 4,830,000 1,93e eee US$19.220,000 USS 5,130,000 7, 138, eee 4,938, cee 2-530,000 US$ 19.220 Bee INCOME STATEMENT For the year ended December 31, Year 2 Sales US$ 43,800,000 Cos of purchases 33,540,800 Change in inventory 608,00 Depreciation expense 280,00 Other expenses 5,490.000 48 330d Profit u 25. a Additional Information 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 Plant and equipment (net) US$ 6,730, eee Inventory 5,830,000 Accounts receivable 6,230,000 cash 910,000 US$ 19, 200,000 Ordinary shares US$ 5,13 ga Retained earnings 7,618, Bonds payable-due Dec. 31, Year 6 4,930, see current Habilities 2.630,000 US$ 19, 70e,dea Year 1 USS 2,430, Bee 6,43e, Bee 4,83e, see 1,030,000 US$19,728,888 US$ 5, 136, see 7, 138, Bee 4,938,888 2,538.00 US19720 INCOME STATEMENT For the year ended December 31, Year 2 Sales LISS4, de Bee DOSE of purchases 3,548, Change inventory bee Bee Dreesatiapente 000, Othedenses Seee US2 Additional Information Exchange rate LUL TAU Gallup | Analytics a... Ontano Real Estate Prime Vides Sard US$ 19 zee, e US$ 19 220, 800 INCOME STATEMENT For the year ended December 31, Year 2 Sales US$ 43,000,000 Cost of purchases 33,540,80 Change in inventory 600,000 Depreciation expense 709,90 Other expenses 5,490,000 48330,00 Profit US$ 2.670 Bee Additional Information Exchange rates Dec Year 1 Sepe Year 2 Dec Year 2 Average fon Year 2 US$16 C51.10 US$1. C$1.87 USS C$1.09 US$1. C$1.08 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$106. Required: (b) Assume that Sandora's functional currency is the US dollar (0) Calculate the Year 2 exchange gain (loss) that would result from the translation of Sandora's financial statements and would be reported in other comprehensive income. (Input all amounts as positive value. Omit currency symbol in your response) Click to select) V C$ (11) Translate the Year 2 financial statements into Canadian dollars. (Round the values in the "Rate" column to 2 decimal places. L amounts should be indicated with a minus sign. Input all other amounts as positive values. Omit currency symbol in your response.) Income Statement Year 2 Rate 0 I Sales cost of purchases Change in inventory Depreciation expense Other expenses Total Profit Other comprehensive Click to selec Click to selec Click to select US$ 43,000,aee 33,540,000 608, Bee 790,000 5,498,888 48.338.800 2,678, unrealized exchange Retained Earnings Statement - Year 2 US$ Rate Balan 130,00 PFA Divad Rate Statement Financial Pasto December 1 Year 2 USI plant and equipment (net) 6,730.09 Inventory 5.830, Accounts receivable 6,250,000 Cash 910,000 19,700,000 ordinary shares 5,130,000 Retained earnings 7,610,00 Accumulated foreign exchange adjustments Bonds payable 4,930.000 current liabilities 2,0,000 19,700, (c) Which functional currency would Sandora prefer to use if it wants to show the following? (D) The strongest solvency position for the company Functional currency is Canadian dollar Functional currency is U.S. dollar and accumulated foreign exchange adjustments (AFEA) are included inequity 10 Functional currency is U.S. dollar and accumulated foreign exchange adjustments (AFEA are excluded from equity ku: The best return on shareholders equity Functional currency is Canadian alan Functional currency U.S. dollar and other comprehensive income toch is included in income. Funaronai eu ency is US dollerend en comprehensive Income ace is excluded income. On December 31. Year 1. Precision Manufacturing Inc. (PMI) of Edmonton purchased 100% of the outstanding ordinary share 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, eee Accounts receivable 6, 23e, eee dash 918,888 US$ 19 7ee089 Ordinary shares US$ 5,130,000 Retained earnings 7,610,000 Bonds payable-due Dec. 31, Year 6 4,980,00 Current liabilities 2.ee, Bee US$ 19790,000 Year US$ 7,430, eee 6,438,000 4,830,000 1,93e eee US$19.220,000 USS 5,130,000 7, 138, eee 4,938, cee 2-530,000 US$ 19.220 Bee INCOME STATEMENT For the year ended December 31, Year 2 Sales US$ 43,800,000 Cos of purchases 33,540,800 Change in inventory 608,00 Depreciation expense 280,00 Other expenses 5,490.000 48 330d Profit u 25. a Additional Information
