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$). As of December 31, 2020, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows: Main Operation-Canada Debit C$ Credit 41,555 42,000 C$ 182,000 41,000 65,000 218,000 8,400 34,000 6,500 Accounts payable Accumulated depreciation Buildings and equipment Cash Common stock Cost of goods sold Depreciation expense Dividends, 4/1/20 Gain on sale of equipment, 6/1/20 Inventory Notes payable-due in 2023 Receivables Retained earnings, 1/1/20 Salary expense Sales Utility expense Branch operation Totals 94,000 84,000 83,000 150,590 38,000 327,000 10,500 7,745 C$ 716,645 C$ 716,645 Branch Operation-Mexico Debit Ps Credit 67,500 40,000 Ps 55,000 66,500 3,500 38,000 35,500 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 Totals 35,500 72,000 36,000 10,500 139,000 35,000 317,000 Ps 317,000 Ps 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$0.21 = 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$7,745 on December 31, 2020. Currency exchange rates for 1 Ps applicable to the Mexican operation follow: C$ 0.26 0.28 Weighted average, 2019 January 1, 2020 Weighted average rate for 2020 December 31, 2020 0.30 0.31 The December 31, 2019, consolidated balance sheet reported a cumulative translation adjustment with a $51,950 credit (positive) balance. The subsidiary's common stock was issued in 2007 when the exchange rate was $0.44 = C$1. The subsidiary's December 31, 2019, retained earnings balance was C$150,590, an amount that has been translated into U.S.$70,363. The applicable currency exchange rates for 1 C$ for translation purposes are as follows: US$ January 1, 2020 April 1, 2020 June 1, 2020 Weighted average rate for 2020 December 31, 2020 0.70 0.69 0.68 0.67 0.65 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 A SENDELBACH CORPORATION Financial Statements For the Year Ended December 31, 2020 Canadian Dollar U.S. Dollar Income Statement: Sales C$ Cost goods sold Gross profit C$ 0 $ 0.00 Depreciation expense Salary expense Utility expense Gain on sale of equipment Net income C$ 0 $ 0.00 Statement of Retained Earnings: Retained eamings, 1/1/20 C$ Net income Dividends Retained earnings, 12/31/20 C$ 0 $ 0.00 LIVIUCHUO Retained earnings, 12/31/20 C$ 0 $ 0.00 Balance Sheet: Assets: Cash C$ Receivables Inventory Building and equipment Accumulated depreciation Total C$ 0 $ 0.00 Liabilities and Equities: Accounts payable CS Notes payable Common stock Retained earnings Cumulative translation adjustment Total C$ 0 $ 0.00 ReqA Reg Bandc