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 OperationCanada
	Debit			Credit
Accounts payable				C$	43,590
Accumulated depreciation					43,000
Buildings and equipment	C$	183,000
Cash		42,000
Common stock					66,000
Cost of goods sold		219,000
Depreciation expense		8,500
Dividends, 4/1/17		35,000
Gain on sale of equipment, 6/1/17					6,600
Inventory		95,000
Notes payabledue in 2020					85,000
Receivables		84,000
Retained earnings, 1/1/17					151,590
Salary expense		39,000
Sales					328,000
Utility expense		10,600
Branch operation		7,680
Totals	C$	723,780		C$	723,780

Branch OperationMexico
	Debit			Credit
Accounts payable				Ps	68,600
Accumulated depreciation					41,600
Building and equipment	Ps	56,000
Cash		67,000
Depreciation expense		3,600
Inventory (beginningincome statement)		39,000
Inventory (endingincome statement)					36,000
Inventory (endingbalance sheet)		36,000
Purchases		73,000
Receivables		37,000
Salary expense		10,600
Sales					140,000
Main office					36,000
Totals	Ps	322,200		Ps	322,200

• The Canadian subsidiarys functional currency is the Canadian dollar, and Sendelbachs 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$0.20 = 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$7,680 on December 31, 2017.

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

Weighted average, 2016	C$	0.25
January 1, 2017		0.27
Weighted average rate for 2017		0.29
December 31, 2017		0.30

• The December 31, 2016, consolidated balance sheet reported a cumulative translation adjustment with a $52,950 credit (positive) balance.

• The subsidiarys common stock was issued in 2004 when the exchange rate was $0.45 = C$1.

• The subsidiarys December 31, 2016, retained earnings balance was C$151,590, an amount that has been translated into U.S.$69,663.

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

January 1, 2017	US$	0.70
April 1, 2017		0.69
June 1, 2017		0.68
Weighted average rate for 2017		0.67
December 31, 2017		0.65

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

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

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

4. 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	$0.00
   Salary expense
   Utility expense
   Depreciation expense
   Gain on sale of equipment
   Remeasurement loss
   Net income	C$	0	$0.00
   Statement of Retained Earnings:
   Retained earnings, 1/1/15	C$
   Net income
   Retained earnings, 12/31/15	C$	0	$0.00
   Balance Sheet:
   Assets:
   Cash	C$
   Buildings and equipment
   Receivables
   Inventory
   Total	C$	0	$0.00
   Liabilities and Equities:
   Common stock	C$
   Cumulative translation adjustment
   Retained earnings
   Total	C$	0	$0.00