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Problem 18-08 Remeasurement under the temporal method (LO 18-3) Mavrogenes Corporation is a wholly owned Canadian subsidiary of a U.S. parent company Mavrogenes was formed

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Problem 18-08 Remeasurement under the temporal method (LO 18-3) Mavrogenes Corporation is a wholly owned Canadian subsidiary of a U.S. parent company Mavrogenes was formed on January 1 20x1, when the parent invested C$40 million and Mavrogenes issued 100 shares of common stock. The following are Mavrogenes's Canadian dollar financial statements for 20X1 and 20X2 2ex2 2axi (in millions of Canadian dollars) Income Statement: Sales Cost of goods sold Other operating expenses Net Income (loss) CS 190 (71) (90) C$ 29 $ 175 (68) (122 C$ (15) C$ (15) Statement of Retained Earnings: Beginning retained earnings (deficit) Net incone (loss) Ending retained earnings (deficit) CS 0 (15) C5 (15) C$ 14 December 31, 20X2 December 31. 20x1 (in millions of Canadian dollars) Balance Sheet: Cash Other monetary assets Fixed assets, net of accumulated depreciation Total assets C5 23 28 24 0575 C$ 11 2e 27 C$ 58 Monetary liabilities Common stock Retained earnings (dericit) Total liabilities and equity C$ 21 40 14 C$ 25 0533 40 (35 CSS3 All transactions were entered into evenly throughout the year, except for the funding by Mavrogenes's parent on January 1 20X1, and the purchase of C530 million in fixed assets, which also took place on January 1 20X1 The fixed assets are being depreciated using the straight line method over 10 years with no salvage value. Depreciation expense is included in other operating expenses The following are relevant exchange rates, all expressed as the US dollar value of Canadian dollar The following are relevant exchange rates, all expressed as the US dollar value of 1 Canadian dollar January 1, 20x1 Average for zexi December 31, 20X1 Average for 20x2 Deceber 31, 20x2 0.80 0.83 0.87 0.86 0.34 Ignore income taxes Required: 1. Translate Mavrogenes's 20X1Income Statement into US dollars using the temporal method 2. Translate Mavrogenes's 20X1 Statement of Retained Earnings into US dollars using the temporal method 3. Translate Mavrogenes's December 31, 20X1. Balance Sheet into US dollars using the temporal method 4. "Prove the foreign exchange gain or loss you found for 20X1 5. Translate Mavrogenes's 20x2 Income Statement into US dollars using the temporal method 6. Translate Mavrogenes's 20X2 Statement of Retained Earnings into US dollars using the temporal method 7 Translate Mavrogenes's December 31, 20X2, Balance Sheet into US dollars using the temporal method 8. *Prove the foreign exchange gain or loss you found for 20X2 Complete this question by entering your answers in the tabs below. Reg 1 to 4 Reg 5 to 8 1. Translate Mavrogenes's 20x 1 Income Statement into U.S. dollars using the temporal method 2. Translate Mavrogenes's 20x1 Statement of Retained Earnings into US dollars using the temporal method. 3. Translate Mavrogenes's December 31, 20x1, Balance sheet into U.S. dollars using the temporal method 4. Prove the foreign exchange gain or loss you found for 20x1. (For all requirements, do not round intermediate calculation. Hound your answers to 2 decimal places Amounts to be deducted should be indicated with a minus sign) Show less 20X1 Exchange 1 come Statement Sales US

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