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 (CS). 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$ 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, 4/1/28 28,000 Gain on sale of equipment, 6/1/20 5,900 Inventory 88,000 Notes payable-due 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 Credit Ps 58,400 22,900 Branch Operation-Mexico Debit Accounts payable Accumulated depreciation Building and equipment Ps 49,000 Cash 63,500 Depreciation expense 2,900 Inventory (beginning-income statement) 32,000 Inventory (ending-income statement) Inventory (ending-balance sheet) 32,500 Purchases 66,000 Receivables 30,000 Salary expense 9,900 Sales Main office Totals Ps 285,800 32,500 133,000 39,000 Ps 285,800 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$0.16 - 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: The Main Office account on the Mexican records should be considered an equity account. This balance was measured Into C$6,300 on December 31, 2020 Currency exchange rates for 1 Ps applicable to the Mexican operation follow Weighted average, 2019 January 1, 2020 Weighted average rate for 2020 December 31, 2020 C$ 0.21 0.23 0.25 0.26 The December 31, 2019, consolidated balance sheet reported a cumulative translation adjustment with a $45,950 credit (positive) balance The subsidiary's common stock was issued in 2007 when the exchange rate was $0.54 = C$1. . The subsidiary's 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 $ for translation purposes are as follows: January 1, 2020 April 1, 2828 June 1, 2020 Weighted average rate for 2020 December 31, 2828 US$ 0.70 0.69 0.68 0.67 8.65 a. Remeasure the Mexican operation's account balances into Canadian dollars. (Note: Back into the beginning net monetary asset or liability position.) 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. Canadian Dollars Debit Credit 15,184 3,664 7,840 16,510 464 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 6,720 8,125 8,125 16,500 7,800 2,475 Main office Remeasurement loss 33,250 6,300 (89) 66,434 Total 66,434 SENDELBACH CORPORATION Financial Statements For the Year Ended December 31, 2020 Canadian Dollar Income Statement: C U.S. Dollar C$ C$ 0 $ 0.00 C$ 0 $ 0.00 Statement of Retained Earnings: Retained earnings, 1/1/20 C$ Retained earnings, 12/31/20 C$ 0 $ 0.00 Balance Sheet: Assets: Assets: C$ Total C$ 0 $ 0.00 Liabilities and Equities: C$ Total C$ 0 $ 0.00