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 33,390 38, eee C$ 178,000 37,200 61,000 214,000 8,888 3e, eee 6,100 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 90,000 se, eee 79,000 146,590 34, eee 323, eee 10,180 7,980 688,888 C$ C$ 688,888 Branch Operation-Mexico Debit PS Credit 60,600 36,188 PS 51,000 64,500 3,100 34, eee 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 33,500 33,500 68,000 32,eee 1e, 100 135,280 31, eee 296, 200 Totals PS 296, 200 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$0.25 = 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$7,980 on December 31, 2020 Currency exchange rates for 1 Ps applicable to the Mexican operation follow: . C$ Weighted average, 2019 January 1, 2020 Weighted average rate for 2020 December 31, 2020 2.30 2.32 8.34 0.35 The December 31, 2019, consolidated balance sheet reported a cumulative translation adjustment with a $47,950 credit (positive) balance. The subsidiary's common stock was issued in 2007 when the exchange rate was $0.40 = C$1. The subsidiary's December 31, 2019, 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: US$ January 1, 2020 April 1, 2020 June 1, 2020 Weighted average rate for 2020 December 31, 2020 e.ze 2.69 8.68 0.67 0.65 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. SENDELEACH CORPORATION Financial Statements For the Year Ended December 31, 2020 Cansinn Dollar Income Statement CS 8. Dollar cs ols 0.00 CS Statement of Retained framing Retained comings, 1/1/20 Retained comings, 12/31/20 CS ols 0.00 Balance Shoot Assets CS Total cs ols 0.00 Llabilities and Equities: C Tota 0.00