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$). As of December 31, 2017, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows: Main Operation-Canada Debit Accounts payable Credit C$ 47,995 Accumulated depreciation 45,000 Buildings and equipment C$ 185,000 Cash 44,000 Common stock 68,000 Cost of goods sold 221,000 Depreciation expense 8,700 Dividends, 4/1/17 37,000 Gain on sale of equipment, 6/1/17 6,800 Inventory 97,000 Notes payable-due in 2020 87,000 Receivables 86,000 Retained earnings, 1/1/17 153,590 Salary expense Sales Utility expense Branch operation Totals 41,000 330,000 10,800 7,885 C$ 738,385 C$ 738,385 Branch Operation-Mexico Debit Accounts payable Credit Ps 70,300 Accumulated depreciation 43,300 Building and equipment Ps 58,000 Cash 68,000 Depreciation expense 3,800 Inventory (beginning-income statement) 41,000 Inventory (ending-income statement) 37,000 Inventory (ending-balance sheet) 37,000 Purchases Receivables Salary expense Sales Main office 75,000 39,000 10,800 Totals 142,000 40,000 Ps 332,600 Ps 332,600 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 2007 when the currency exchange rate was C$0.18 = Ps 1. Purchases of inventory were made evenly throughout the fiscal year. Beginning inventory was acquired evenly throughout 2016; ending inventory was acquired evenly throughout 2017. The Main Office account on the Mexican records should be considered an equity account. This balance was remeasured into C$7,885 on December 31, 2017. Currency exchange rates for 1 Ps applicable to the Mexican operation follow: Weighted average, 2016 January 1, 2017 Weighted average rate for 2017 December 31, 2017 C$ 0.23 0.25 0.27 0.28 The December 31, 2016, consolidated balance sheet reported a cumulative translation adjustment with a $54,950 credit (positive) balance. The subsidiary's common stock was issued in 2004 when the exchange rate was $0.47 = C$1. The subsidiary's December 31, 2016, retained earnings balance was C$153,590, an amount that has been translated into U.S.$68,203. The applicable currency exchange rates for 1 C$ for translation purposes are as follows: January 1, 2017 April 1, 2017 June 1, 2017 Weighted average rate for 2017 December 31, 2017 US$ 0.70 0.69 0.68 0.67 0.65 a. Remeasure the Mexican operation's account balances into Canadian dollars. (Note: Back into the beginning net monetary asset or liability position.) 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. Req A Req B and C Remeasure the Mexican operation's account balances into Canadian dollars. (Note: Back into the beginning net monetary asset or liability position.) (Input all amounts as positive values.) Accounts payable Accumulated depreciation Building and equipment Cash Depreciation expense | Inventory (beginning-income statement) Inventory (ending-income statement) Inventory (ending-balance sheet) Purchases Receivables Salary expense Sales Main office Total Canadian Dollars Debit Credit 0 0 Req A Req B and C > 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. (Round U.S. Dollar values to 2 decimal places. Amounts to be deducted and losses should be indicated with a minus sign.) Show less SENDELBACH CORPORATION Financial Statements For the Year Ended December 31, 2017 Canadian Dollar U.S. Dollar Income Statement: Sales C$ Cost of goods sold Gross profit C$ 0 $ 0.00 Depreciation expense Salary expense Utility expense Gain on sale of equipment Remeasurement loss Net income Statement of Retained Earnings: C$ 0 $ 0.00 Retained earnings, 1/1/15 C$ Net income Dividends Retained earnings, 12/31/15 C$ 0 $ 0.00 Balance Sheet: Balance Sheet: Cash Receivables Inventory Assets: C$ Buildings and equipment Accumulated depreciation Total C$ 0 $ 0.00 Liabilities and Equities: Accounts payable C$ Notes payable Common stock Retained earnings Total C$ 0 $ 0.00 < Req A Req B and C