On January 1, Year 2, Par Corporation of Canada paid FCU 7.0 million for 64% of the outstanding common shares of Sub Company of Sweden. On this date the fair values of Subs identifiable assets and liabilities were equal to their carrying values. Subs comparative balance sheets and Year 2 income statement are as follows: Sub Balance Sheet December 31 Year 2 Year 1 Cash, Accounts Receivable FCU 7,590,000 FCU 4,400,000 Inventory 1,830,000 2,200,000 Plant and equipment (net) 4,790,000 5,290,000 FCU 14,210,000 FCU 11,890,000 Accounts payable FCU 1,500,000 FCU 1,590,000 Note payable 3,900,000 3,000,000 Common shares 4,000,000 4,000,000 Retained earnings 4,810,000 3,300,000 FCU 14,210,000 FCU 11,890,000 Sub Income Statement For the year ended December 31, Year 2 Sales FCU 9,600,000 ) Cost of Goods sold 5,700,000 Depreciation expense 500,000 Other expense 1,300,000 Interest expense 400,000 Net income FCU 1,700,000 Following is the Balance Sheet of Par at December 31, Year 2: PAR Cash, Accounts Receivable $ 1,000,000 Inventory 850,000 Goodwill 50,000 Plant and equipment (net) 2,000,000 $ 3,900,000 Accounts payable $ 200,000 Note payable 900,000 Common shares 1,500,000 Retained earnings 1,300,000 $ 3,900,000 Other information: Exchange rates: Last quarter of Year 1 average FCU 1 = $2.10 January 1, Year 2 FCU 1 = $2.00 October 31, Year 2 FCU 1 = $1.80 Last quarter of Year 2 average FCU 1 = $1.77 Average for Year 2 FCU 1 = $1.82 December 31, Year 2 FCU 1 = $1.60 Sub Company declared and paid dividends totaling FCU 190,000 on October 31, Year 2. Sub purchased opening and ending inventory evenly over the 4th quarter of Year 1 and Year 2, respectively. REQUIRED: Show ALL calculations for FULL marks. Round to the nearest dollar Part A. Assume self-sustaining relationship (functional currency is FCU). i) Calculate the translated comprehensive income. 4.5 marks ii) How much goodwill would appear on the consolidated balance sheet at December 31, Year 2? Assume there was a goodwill impairment loss of FCU 1,000,000 in Year 2 relating to the AD schedule. Hint: prepare the calculation for the exchange gain/loss on the translation of goodwill that would be included in accumulated other comprehensive income. 4 marks iii) Prepare account balances for the liabilities and shareholders equity portion of the consolidated balance sheet at December 31, Year 2. Your answer should include a detailed calculation of consolidated RE, accumulated other comprehensive income and noncontrolling interest. 10.5 marks Part B. Ignore your answers above and now assume an integrated relationship (i.e. functional currency is Canadian dollars). Prepare the translated income statement for Year 2. Hint: Translated NI = $2,065,100. 13 marks