On January 1, 2021, Mary Ltd. (ML), a Canadian company, acquired 90% of Jane Co. (JC), a foreign company, for FC 623,200. At the acquisition date, the carrying value of JC's net assets equaled their fair value except for the equipment which had a carrying value of FC 800,000 and a fair value of FC 500,000. At the acquisition date, JC's equipment had a remaining useful life of 10 years. There was a FC 25,000 impairment of the goodwill which occured evenly throughout 2020. ML declared and paid dividends of $928,000 on December 31, 2020. JC declared and paid dividends of FC 164,000 on December 31, 2020. Selected financial statements for ML and JC are presented below. Mary Ltd. Statement of Financial Position As of December 31, 2020 (in $ CAD) Assets Current assets Cash and cash equivalents Accounts receivable Inventory Mary Ltd. Statement of income For the year ended December 31, 2020 (in $ CAD) Sales $ 16,246,180 Dividend income 405,900 16,652,080 Cost of sales $ 8,256,000 Other expenses* 7,124,000 15,380,000 Net income $ 1,272,080 $ 562,080 700,000 1,376,000 2,638,080 Noncurrent assets Plant and equipment, net Investment in Jane Co. *includes depreciation 2,752,000 1,558,000 4,310,000 $ 6,948,080 Total assets $ 923,600 Liabilities and shareholders' equity Liabilities Current liabilities Accounts payable and accrued liabilities Non current liabilities Notes payable 1,860,000 2,783,600 Shareholders' equity Share capital Retained earnings 1,562,960 2,601,520 4,164,480 $ 6,948,080 Total liabilities and shareholders' equity Jane Co. Statement of Financial Position (in FC) Jane Co. Statement of income For the year ended December 31, 2020 (in FC) 8,400,000 Dec. 31, 2020 Jan. 1, 2021 Sales Assets Current assets Cash and cash equivalents Accounts receivable Inventory Cost of sales Other expenses* Net income 5,304,000 2,688,000 7,992,000 408,000 360,000 408,000 484,000 1,252,000 164,000 280,000 364,000 808,000 *includes depreciation Noncurrent assets Plant and equipment, net Total assets 720,000 1,972,000 800,000 1,608,000 542,000 422,000 Liabilities and shareholders' equity Liabilities Current liabilities Accounts payable and accrued liabilities Non current liabilities Notes payable Jane Co. Statement of Changes in Equity Retained Earnings Section For the year ended December 31, 2020 (in FC) Retained earnings, Jan. 1, 2021 146,000 Net income 408,000 Dividends declared (164,000) Retained earnings, Dec. 31, 2020 390,000 640,000 1,182,000 640,000 1,062,000 Shareholders' equity Share capital Retained earnings 400,000 390,000 790,000 1,972,000 400,000 146,000 546,000 1,608,000 Total liabilities and shareholders' equity Selected Exchange Rates January 1, 2021 December 31, 2020 Date when ending inventory was purchased average for 2020 1 FC = X.XX CAD $2.50 $2.75 $2.68 $2.69 Required: Prepare the consolidated financial statements at December 31, 2020, using a. the functional currency translation (FCT) method (assuming the Canadian dollar is the functional currency) and b. the presentation currency translation (PCT) method. On January 1, 2021, Mary Ltd. (ML), a Canadian company, acquired 90% of Jane Co. (JC), a foreign company, for FC 623,200. At the acquisition date, the carrying value of JC's net assets equaled their fair value except for the equipment which had a carrying value of FC 800,000 and a fair value of FC 500,000. At the acquisition date, JC's equipment had a remaining useful life of 10 years. There was a FC 25,000 impairment of the goodwill which occured evenly throughout 2020. ML declared and paid dividends of $928,000 on December 31, 2020. JC declared and paid dividends of FC 164,000 on December 31, 2020. Selected financial statements for ML and JC are presented below. Mary Ltd. Statement of Financial Position As of December 31, 2020 (in $ CAD) Assets Current assets Cash and cash equivalents Accounts receivable Inventory Mary Ltd. Statement of income For the year ended December 31, 2020 (in $ CAD) Sales $ 16,246,180 Dividend income 405,900 16,652,080 Cost of sales $ 8,256,000 Other expenses* 7,124,000 15,380,000 Net income $ 1,272,080 $ 562,080 700,000 1,376,000 2,638,080 Noncurrent assets Plant and equipment, net Investment in Jane Co. *includes depreciation 2,752,000 1,558,000 4,310,000 $ 6,948,080 Total assets $ 923,600 Liabilities and shareholders' equity Liabilities Current liabilities Accounts payable and accrued liabilities Non current liabilities Notes payable 1,860,000 2,783,600 Shareholders' equity Share capital Retained earnings 1,562,960 2,601,520 4,164,480 $ 6,948,080 Total liabilities and shareholders' equity Jane Co. Statement of Financial Position (in FC) Jane Co. Statement of income For the year ended December 31, 2020 (in FC) 8,400,000 Dec. 31, 2020 Jan. 1, 2021 Sales Assets Current assets Cash and cash equivalents Accounts receivable Inventory Cost of sales Other expenses* Net income 5,304,000 2,688,000 7,992,000 408,000 360,000 408,000 484,000 1,252,000 164,000 280,000 364,000 808,000 *includes depreciation Noncurrent assets Plant and equipment, net Total assets 720,000 1,972,000 800,000 1,608,000 542,000 422,000 Liabilities and shareholders' equity Liabilities Current liabilities Accounts payable and accrued liabilities Non current liabilities Notes payable Jane Co. Statement of Changes in Equity Retained Earnings Section For the year ended December 31, 2020 (in FC) Retained earnings, Jan. 1, 2021 146,000 Net income 408,000 Dividends declared (164,000) Retained earnings, Dec. 31, 2020 390,000 640,000 1,182,000 640,000 1,062,000 Shareholders' equity Share capital Retained earnings 400,000 390,000 790,000 1,972,000 400,000 146,000 546,000 1,608,000 Total liabilities and shareholders' equity Selected Exchange Rates January 1, 2021 December 31, 2020 Date when ending inventory was purchased average for 2020 1 FC = X.XX CAD $2.50 $2.75 $2.68 $2.69 Required: Prepare the consolidated financial statements at December 31, 2020, using a. the functional currency translation (FCT) method (assuming the Canadian dollar is the functional currency) and b. the presentation currency translation (PCT) method