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 OperationCanada Debit CreditAccounts payable C$27,510Accumulated depreciation 36,000Buildings and equipmentC$176,000 Cash 35,000 Common stock 59,000Cost of goods sold 212,000 Depreciation expense 7,800 Dividends, 4/1/20 28,000 Gain on sale of equipment, 6/1/20 5,900Inventory 88,000 Notes payabledue in 2023 78,000Receivables 77,000 Retained earnings, 1/1/20 144,590Salary expense 32,000 Sales 321,000Utility expense 9,900 Branch operation 6,300 TotalsC$672,000 C$672,000

Branch OperationMexico Debit CreditAccounts payable Ps58,400Accumulated depreciation 22,900Building and equipmentPs49,000 Cash 63,500 Depreciation expense 2,900 Inventory (beginningincome statement) 32,000 Inventory (endingincome statement) 32,500Inventory (endingbalance sheet) 32,500 Purchases 66,000 Receivables 30,000 Salary expense 9,900 Sales 133,000Main office 39,000TotalsPs285,800 Ps285,800

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 2010 when the currency exchange rate was C$0.16 = 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$6,300 on December 31, 2020.

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

Weighted average, 2019C$0.21January 1, 2020 0.23Weighted average rate for 2020 0.25December 31, 2020 0.26

The December 31, 2019, consolidated balance sheet reported a cumulative translation adjustment with a $45,950 credit (positive) balance.

The subsidiarys common stock was issued in 2007 when the exchange rate was $0.54 = C$1.

The subsidiarys December 31, 2019, retained earnings balance was C$144,590, an amount that has been translated into U.S.$64,703.

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

January 1, 2020US$0.70April 1, 2020 0.69June 1, 2020 0.68Weighted average rate for 2020 0.67December 31, 2020 0.65

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

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

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