Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2019, the subsidiary had the following balance sheet (amounts are in thousands [000s]):

Sendelbach Corporation is a U.S.-based organization with operations throughout the world. One of its subsidiaries is headquartered in Toronto. Although this wholly owned company operates primarily in Canada, it engages in some transactions through a branch in Mexico. Therefore, the subsidiary maintains a ledger denominated in Mexican pesos (Ps) and a general ledger in Canadian dollars (C$). As of December 31, 2020, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows:

Main OperationCanada
	Debit			Credit
Accounts payable				C$	27,510
Accumulated depreciation					36,000
Buildings and equipment	C$	176,000
Cash		35,000
Common stock					59,000
Cost of goods sold		212,000
Depreciation expense		7,800
Dividends, 4/1/20		28,000
Gain on sale of equipment, 6/1/20					5,900
Inventory		88,000
Notes payabledue in 2023					78,000
Receivables		77,000
Retained earnings, 1/1/20					144,590
Salary expense		32,000
Sales					321,000
Utility expense		9,900
Branch operation		6,300
Totals	C$	672,000		C$	672,000

Branch OperationMexico
	Debit			Credit
Accounts payable				Ps	58,400
Accumulated depreciation					22,900
Building and equipment	Ps	49,000
Cash		63,500
Depreciation expense		2,900
Inventory (beginningincome statement)		32,000
Inventory (endingincome statement)					32,500
Inventory (endingbalance sheet)		32,500
Purchases		66,000
Receivables		30,000
Salary expense		9,900
Sales					133,000
Main office					39,000
Totals	Ps	285,800		Ps	285,800

Additional Information

• The Canadian subsidiarys functional currency is the Canadian dollar, and Sendelbachs reporting currency is the U.S. dollar. The Canadian and Mexican operations are not viewed as separate accounting entities.

• The building and equipment used in the Mexican operation were acquired in 2010 when the currency exchange rate was C$0.16 = Ps 1.

• Purchases of inventory were made evenly throughout the fiscal year.

• Beginning inventory was acquired evenly throughout 2019; ending inventory was acquired evenly throughout 2020.

• The Main Office account on the Mexican records should be considered an equity account. This balance was remeasured into C$6,300 on December 31, 2020.

• Currency exchange rates for 1 Ps applicable to the Mexican operation follow:

Weighted average, 2019	C$	0.21
January 1, 2020		0.23
Weighted average rate for 2020		0.25
December 31, 2020		0.26

• The December 31, 2019, consolidated balance sheet reported a cumulative translation adjustment with a $45,950 credit (positive) balance.

• The subsidiarys common stock was issued in 2007 when the exchange rate was $0.54 = C$1.

• The subsidiarys December 31, 2019, retained earnings balance was C$144,590, an amount that has been translated into U.S.$64,703.

• The applicable currency exchange rates for 1 C$ for translation purposes are as follows:

January 1, 2020	US$	0.70
April 1, 2020		0.69
June 1, 2020		0.68
Weighted average rate for 2020		0.67
December 31, 2020		0.65

1. Remeasure the Mexican operations account balances into Canadian dollars. (Note: Back into the beginning net monetary asset or liability position.)

2. Prepare financial statements (income statement, statement of retained earnings, and balance sheet) for the Canadian subsidiary in its functional currency, Canadian dollars.

3. Translate the Canadian dollar functional currency financial statements into U.S. dollars so that Sendelbach can prepare consolidated financial statements.

The subsidiary acquired the inventory on August 1, 2019, and the land and building in 2013. It issued the common stock in 2011. During 2020, the following transactions took place:

2020
Feb.	1		Paid 8,220,000 NGN on the note payable.
May	1		Sold entire inventory for 18,200,000 NGN on account.
June	1		Sold land for 6,220,000 NGN cash.
Aug.	1		Collected all accounts receivable.
Sept.	1		Signed long-term note to receive 8,220,000 NGN cash.
Oct.	1		Bought inventory for 20,220,000 NGN cash.
Nov.	1		Bought land for 3,220,000 NGN on account.
Dec.	1		Declared and paid 3,220,000 NGN cash dividend to parent.
Dec.	31		Recorded depreciation for the entire year of 2,110,000 NGN.

The U.S dollar ($) exchange rates for 1 NGN are as follows:

2011	NGN 1	=	$	0.0070
2013	1	=		0.0064
August 1, 2019	1	=		0.0084
December 31, 2019	1	=		0.0086
February 1, 2020	1	=		0.0088
May 1, 2020	1	=		0.0090
June 1, 2020	1	=		0.0092
August 1, 2020	1	=		0.0096
September 1, 2020	1	=		0.0098
October 1, 2020	1	=		0.0100
November 1, 2020	1	=		0.0102
December 1, 2020	1	=		0.0104
December 31, 2020	1	=		0.0128
Average for 2020	1	=		0.0118

(Input all amounts as positive. Enter amounts in whole dollars.)

• Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2020?

• Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2020?

Complete this question by entering your answers in the tabs below.

• Req A
• Req B and C

b. Prepare financial statements (income statement, statement of retained earnings, and balance sheet) for the Canadian subsidiary in its functional currency, Canadian dollars. c. Translate the Canadian dollar functional currency financial statements into U.S. dollars so that Sendelbach can prepare consolidated financial statements.