On January 1, 20X1, Par Company purchased all the outstanding stock of South Bay Company, located in Canada, for $137,700. On January 1, 20X1, the direct exchange rate for the Canadian dollar (C$) was C$1 = $0.81. South Bay's book value on January 1, 20X1, was C$97,000. The fair value of South Bay's plant and equipment was C$9,500 more than book value, and the plant and equipment are being depreciated over 10 years with no salvage value. The remainder of the differential is attributable to a trademark, which will be amortized over 10 years. During 20X1, South Bay earned C$22,000 in income and declared and paid C$8,700 in dividends. The dividends were declared and paid in Canadian dollars when the exchange rate was C$1 = $0.75. On December 31, 20X1, Par continues to hold the Canadian currency received from the dividend. On December 31, 20X1, the direct exchange rate is C$1 = $0.64. The average exchange rate during 20X1 was C$1 = $0.76. Management has determined that the Canadian dollar is South Bay's appropriate functional currency. Required: a. Prepare a schedule showing the differential allocation and amortization for 20X1. The schedule should present both Canadian dollars and U.S. dollars. b. Par uses the fully adjusted equity method to account for its investment. Provide the entries that it would record in 20X1 for its investment in South Bay for the following items: c. Prepare a schedule showing the proof of the translation adjustment for South Bay as a result of the translation of the subsidiary's accounts from Canadian dollars to U.S. dollars. Then provide the entry that Par would record for its share of the translation adjustment resulting from the translation of the subsidiary's accounts. d. Provide the entry required by Par to restate the C$8,700 in the Foreign Currency Units account into its year-end U.S. dollar- equivalent value. Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required C1 Required C2 Required D Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required C1 Required C2 Required D Prepare a schedule showing the differential allocation and amortization for 20X1. The schedule should present both Canadian dollars and U.S. dollars. Note: Amounts to be deducted should be entered with a minus sign. Round "Exchange Rate" answers to 2 decimal places and rest of answers to nearest whole dollar. Show less Income Statement: Differential at date of acquisition: Amortization this period: (10 years) Remaining balance: Balance Sheet: Canadian Dollars U.S. Dollars Plant and equipment Trademark Exchange Rate Plant and equipment Trademark $ 0 $ 0 $ 0 $ 0 Remaining balance on 12/31/X1 translated at year-end exchange rates: C Difference to OCI-translation adjustment: $ 0 0 Required A1 Required A2 Required B Required C1 Required C2 Required D Par uses the fully adjusted equity method to account for its investment. Provide the entries that it would record in 20X1 for its investment in South Bay for the following items: Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar. Show less View transaction list Journal entry worksheet A B C D E Record the acquisition of South Bay Company. Note: Enter debits before credits. Event 1 General Journal Debit Credit Par uses the fully adjusted equity method to account for its investment. Provide the entries that it would record in 20X1 for its investment in South Bay for the following items: Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar. View transaction list Journal entry worksheet Show less Required A1 Required A2 Required B Required C1 Required C2 Required D Par uses the fully adjusted equity method to account for its investment. Provide the entries that it would record in 20X1 for its investment in South Bay for the following items: Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar. View transaction list Journal entry worksheet Show less Required A1 Required A2 Required B Required C1 Required C2 Required D Par uses the fully adjusted equity method to account for its investment. Provide the entries that it would record in 20X1 for its investment in South Bay for the following items: Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar. Show less View transaction list Journal entry worksheet Show less Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required C1 Required C2 Required D Provide the entry required by Par to restate the C$8,200 in the Foreign Currency Units account into its year-end U.S. dollar-equivalent value. Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to nearest whole dollar. View transaction list Journal entry worksheet Show less Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required C1 Required C2 Required D Prepare a schedule showing the differential allocation and amortization for 20X1. The schedule should present both Canadian dollars and U.S. dollars. Note: Amounts to be deducted should be entered with a minus sign. Round "Exchange Rate" answers to 2 decimal places and rest of answers to nearest whole dollar. View transaction list Journal entry worksheet A Record the exchange loss on the foreign currency units held on December 31, 20X1. Note: Enter debits before credits. Event 1 General Journal Debit Credit Show less