Sendelbach Corporation is a U.S.-based organization with operations throughout the world. One of its subsidiaries is headquartered in Toronto, Canada. Although this wholly-owned subsidiary 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, 2024, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows:

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 2014 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 2023; ending inventory was acquired evenly throughout 2024.

The Main Office account on the Mexican records should be considered an equity account. This balance was remeasured into C$9,140 on December 31, 2024.

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

Weighted average rate for 2023	C$ 0.26
January 1, 2024	0.28
Weighted average rate for 2024	0.30
December 31, 2024	0.31

The December 31, 2023, consolidated balance sheet reported a cumulative translation adjustment with a $60,950 credit (positive) balance.

The subsidiarys common stock was issued in 2011 when the exchange rate was $0.45 = C$1.

The subsidiarys December 31, 2023, retained earnings balance was C$159,590, an amount that has been translated into US$63,343.

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

January 1, 2024	US$ 0.70
April 1, 2024	0.69
June 1, 2024	0.68
Weighted average rate for 2024	0.67
December 31, 2024	0.65

Required:

A)Remeasure the Mexican operations 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.

A)

B and C)

Please provide the conversion for the Common stock to US Dollars and the Cumulative translation adjustment. All of the other answers are complete and correct.

\begin{tabular}{|l|r|r|} \hline Purchases & 24,300 & \\ \hline Receivables & 13,950 & \\ \hline Salary expense & 3,420 & \\ \hline Sales & & 44,400 \\ \hline Main office & & 9,140 \\ \hline & 44 & \\ \hline Total & 102,308 & 102,308 \\ \hline \hline \end{tabular} \begin{tabular}{lrr} & Main Operation-Canada & \multicolumn{1}{c}{ Credit } \\ Accounts payable & & C$61,850 \\ Accumulated depreciation & & 51,000 \\ Buildings and equipment & C$191,000 & \\ Cash & 50,000 & \\ Common stock & 227,000 & 74,000 \\ Cost of goods sold & 9,300 & \\ Depreciation expense & 43,000 & \\ Dividends,4/1/24Gainonsaleofequipment,6/1/24 & 103,000 & 7,400 \\ Inventory & & \\ Notes payable-due in 2027 & 92,000 & 93,000 \\ Receivables & & 159,590 \\ Retained earnings, 1/1/24 & 47,000 & \end{tabular} \begin{tabular}{lrr} & Debit & \multicolumn{1}{c}{ Credit } \\ Accounts payable & & Ps 80,400 \\ Accumulated depreciation & & 56,400 \\ Building and equipment & Ps 64,000 & \\ Cash & 71,000 & \\ Depreciation expense & 4,400 & \\ Inventory (beginning-income statement) & 47,000 & \\ Inventory (ending-income statement) & & 40,000 \\ Inventory (ending-balance sheet) & 40,000 & \\ Purchases & 81,000 & \\ Receivables & 45,000 & \\ Salary expense & 11,400 & \\ Sales & & 148,000 \\ Main office & & 39,000 \\ Totals & & \\ \cline { 2 - 3 } & Ps 363,800 & Ps 363,800 \end{tabular}