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$	33,390
Accumulated depreciation					38,000
Buildings and equipment	C$	178,000
Cash		37,000
Common stock					61,000
Cost of goods sold		214,000
Depreciation expense		8,000
Dividends, 4/1/17		30,000
Gain on sale of equipment, 6/1/17					6,100
Inventory		90,000
Notes payabledue in 2020					80,000
Receivables		79,000
Retained earnings, 1/1/17					146,590
Salary expense		34,000
Sales					323,000
Utility expense		10,100
Branch operation		7,980
Totals	C$	688,080		C$	688,080

Branch OperationMexico
	Debit			Credit
Accounts payable				Ps	60,600
Accumulated depreciation					36,100
Building and equipment	Ps	51,000
Cash		64,500
Depreciation expense		3,100
Inventory (beginningincome statement)		34,000
Inventory (endingincome statement)					33,500
Inventory (endingbalance sheet)		33,500
Purchases		68,000
Receivables		32,000
Salary expense		10,100
Sales					135,000
Main office					31,000
Totals	Ps	296,200		Ps	296,200

Additional Information

• 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$0.25 = 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$7,980 on December 31, 2017.

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

Weighted average, 2016	C$	0.30
January 1, 2017		0.32
Weighted average rate for 2017		0.34
December 31, 2017		0.35

• The December 31, 2016, consolidated balance sheet reported a cumulative translation adjustment with a $47,950 credit (positive) balance.

• The subsidiarys common stock was issued in 2004 when the exchange rate was $0.40 = C$1.

• The subsidiarys December 31, 2016, retained earnings balance was C$146,590, an amount that has been translated into U.S.$72,963.

• 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.