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 Operation$$Canada

Debit$$

Credit$$

Accounts payable

C$$35,000$

Accumulated depreciation

$27,000$

Buildings and equipment

C$$167,000$

Cash

$26,000$

Common stock

$50,000$

Cost of goods sold

$203,000$

Depreciation expense

$8,000$

Dividends, $4/1/20$

$28,000$

Gain on sale of equipment, $6/1/20$

$5,000$

Inventory

$98,000$

Notes payable$$due in $2023$

$76,000$

Receivables

$68,000$

Retained earnings, $1/1/20$

$135,530$

Salary expense

$26,000$

Sales

$312,000$

Utility expense

$9,000$

Branch operation

$7,530$

$$

Totals

C$$640,530$

C$$640,530$

page $529$

Branch Operation$$Mexico

Debit$$

Credit$$

Accounts payable

Ps$49,000$

Accumulated depreciation

$19,000$

Building and equipment

Ps$40,000$

Cash

$59,000$

Depreciation expense

$2,000$

Inventory $($beginning$$income statement$)$

$23,000$

Inventory $($ending$$income statement$)$

$28,000$

Inventory $($ending$$balance sheet$)$

$28,000$

Purchases

$68,000$

Receivables

$21,000$

Salary expense

$9,000$

Sales

$124,000$

Main office

$$

$30,000$

Totals

Ps $250,000$

Ps $250,000$

Additional Information

The Canadian subsidiary$$s functional currency is the Canadian dollar, and Sendelbach$$s 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\mathrm{.}25=$ 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$$7,530$ on December $31,2020.$

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

Weighted average rate for $2019$

C$$0\mathrm{.}30$

January $1,2020$

$0\mathrm{.}32$

Weighted average rate for $2020$

$0\mathrm{.}34$

December $31,2020$

$0\mathrm{.}35$

The December $31,2019,$ consolidated balance sheet reported a cumulative translation adjustment with a $$36,950$ credit $($positive$)$ balance.

The subsidiary$$s common stock was issued in $2007$ when the exchange rate was $$0\mathrm{.}45=$ C$$1.$

The subsidiary$$s December $31,2019,$ retained earnings balance was C$$135,530,$ an amount that has been translated into U$.$S$.$ $$70,421.$

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

January $1,2020$

US$$0\mathrm{.}70$

April $1,2020$

$0\mathrm{.}69$

June $1,2020$

$0\mathrm{.}68$

Weighted average rate for $2020$

$0\mathrm{.}67$

December $31,2020$

$0\mathrm{.}65$

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

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

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