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$). As of December 31, 2020, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows: Main Operation-Canada Debit Accounts payable Accumulated depreciation Credit C$ 11,860 28,000 Buildings and equipment Cash C$ 168,000 27,000 Common stock 51,000 Cost of goods sold 204,000 Depreciation expense 7,000 Dividends, 4/1/20 20,000 Gain on sale of equipment, 6/1/20 5,100 Inventory 80,000 Notes payable-due in 2023 70,000 Receivables Retained earnings, 1/1/20 Salary expense Sales Utility expense Branch operation 69,000 136,590 24,000 313,000 9,100 7,450 Totals C$ 615,550 C$ 615,550 Branch Operation-Mexico Debit Credit Accounts payable PS 51,600 Accumulated depreciation 19,100 Building and equipment Cash Ps 41,000 59,500 Depreciation expense Inventory (beginning-income statement) Inventory (ending-income statement) Inventory (ending-balance sheet) Purchases Receivables Salary expense Sales Main office Totals 2,100 24,000 28,500 28,500 69,000 22,000 9,100 125,000 31,000 Ps 255,200 Ps 255,200 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$0.24 = 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$7,450 on December 31, 2020. Currency exchange rates for 1 Ps applicable to the Mexican operation follow: Weighted average, 2019 January 1, 2020 Weighted average rate for 2020. December 31, 2020 C$ 0.29 0.31 0.33 0.34 The December 31, 2019, consolidated balance sheet reported a cumulative translation adjustment with a $37,950 credit (positive) balance. The subsidiary's common stock was issued in 2007 when the exchange rate was $0.46 = C$1. The subsidiary's December 31, 2019, retained earnings balance was C$136,590, an amount that has been translated into U.S.$69,903. The applicable currency exchange rates for 1 C$ for translation purposes are as follows: January 1, 2020 April 1, 2020 June 1, 2020 Weighted average rate for 2020 December 31, 2020 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.