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 Bays book value on January 1, 20X1, was C$86,000. The fair value of South Bays plant and equipment was C$9,200 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$27,000 in income and declared and paid C$8,400 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 Bays 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. (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.) $ Canadian Dollars Exchange Rate U.S. Dollars Investment cost C 170,000 0.81 Book value of investment on January 1, 20X1 86,000 0.81 Differential C $ 137,700 69,660 $ 84,000 $ 68,040 $ $ Canadian Dollars Exchange Rate U.S. Dollars Plant and equipment Trademark Plant and equipment Trademark Income Statement: Differential at date of acquisition: C 2,700 C 137,700 9,200.00 Amortization this period: (10 years) (86,000) (76,140) Remaining balance: C C Balance Sheet: Remaining balance on 12/31/X1 translated at year-end exchange rates: C C Difference to OCItranslation adjustment: $24,840,000 $ 1,266,840,000 $ (83,300) $ 61,560 $24,840,000 $ 1,266,840,000 $ 61,560 $24,840,000 $ 1,266,840,000