On January 1, Year 4, P Company (a Canadian company) purchased 90% of S Company (located in a foreign country) at a cost of 15,580 foreign currency units (FC).

The carrying amounts of S Company's net assets were equal to fair values on this date except for plant and equipment, which had a fair value of FC22,000, with a remaining useful life of 10 years. A goodwill impairment loss of FC100 occurred evenly throughout Year 4.

The following exchange rates were in effect during Year 4:

Jan. 1 FC1 = $1.10

Average for year FC1 = $1.16

When ending inventory purchased FC1 = $1.1q

Dec. 31 FC1 = $1.22

The statement of financial position of S Company on January 1, Year 4, is as follows:

The December 31, Year 4, financial statements of P Company (in $) and S Company (in FC) are shown below:

Dividends were declared on December 31, Year 4, in the amount of $23,200 by P Company and FC4,100 by S Company.

Required

(a) Prepare the December 31, Year 4, consolidated financial statements, assuming that S Company's functional currency is each of the following:

(i) The Canadian dollar

(ii) The foreign currency unit

Plant and equipment (net) Inventory Monetary assets (current) S Company (FC) 20,000 9,100 11,100 40,200 Ordinary shares Retained earnings Bonds payable (mature in eight years) Current liabilities 10,000 3,650 16,000 10,550 40,200 s Company (FC) 18,000 STATEMENT OF FINANCIAL POSITION P Company ($) 68,800 17,138 34,400 31,552 151,890 Plant and equipment (net) Investment in S Company (at cost) Inventory Monetary assets (current) - 12,100 19,200 49,300 Ordinary shares Retained earnings Bonds payable Current monetary liabilities 34,400 47,900 46,500 23,090 151,890 10,000 9,750 16,000 13,550 49,300 INCOME STATEMENT 210,000 - Sales Dividend income Cost of sales Other expenses (including depreciation) Profit 411,800 4,502 (206,400) (178,100) 31,802 (132,600) (67,200) 10,200