Sweet Aroma Relaxation Services Inc. (SARS) is a Canadian company. Its functional and reporting currency is the Canadian dollar. SARS purchased 100% of the common shares of Chiapas Olfactory Identification Inc. (COVID), a Mexican company, on December 31, 2019. COVID's comparative statement of financial position as at December 31, 2022, and statement of comprehensive income for the year ended December 31, 2022, follow, (in Mexican Peso - MX): Chiapas Olfactory Identification Inc. Statement of financial position As at December 31 Chiapas Olfactory Identification Inc. Statement of comprehensive income Eartha wanne andand namamhar 21 m3? Additional information: 1. Both companies report their financial results in accordance with IFRS and have a common year end of December 31 . 2. COVID's sales were made, and other expenses incurred, evenly throughout year. 3. COVID uses the FIFO cost formula to value its inventories. 4. COVID purchased MX 30,200,000 of inventory on January 1,2022 , MX 11,729,000 of inventory on July 1,2022 , and MX 12,608,000 on December 15, 2022. The closing inventory on December 31, 2021, was purchased on December 31, 2021. 5. The plant, equipment and land assets reported on COVID's statement of financial position as at December 31, 2021, were all acquired on December 31,2018 . COVID purchased an additional MX 700,000 of equipment on January 1, 2022 and brought it into use on that date. All plant and equipment is depreciated on a straight-line basis over five years. These assets have no residual value for purposes of depreciation. 6. COVID declared dividends on December 15,2022 . The dividends were paid on December 31, 2022. 7. The Canadian dollar equivalent of COVID's retained earnings as at December 31, 2021, was C $2,139,453. 8. Significant exchange rates: December 31, 2018 MX1.00=C$0.072 December 31, 2019 MX1.00=C$0.070 December 31, 2020 MX1.00=C$0.069 December 31, 2021 MX1.00=C$0.067 January 1, 2022 MX1.00=C$0.068 July1,2022December15,2022MX1.00=C$0.066MX1.00=C$0.065 December 31, 2022 MX 1.00=C$0.064 Average rate for 2021MX1.00=C$0.0685 Average rate for 2022MX1.00=C$0.0665 Assume that COVID's functional currency is the Mexican Peso. The balance in the cumulative translation adjustment account included in accumulated other comprehensive income (AOCl) as at December 31, 2021, was a debit of C$109,350. a) Calculate the foreign exchange gain or loss on COVID's net assets for 2022 and make note of whether it is a gain or a loss. (5 marks) b) Translate COVID's statement of comprehensive income for the year ended December 31, 2022. (5 marks) c) Reconcile the change in COVID's translated retained earnings for the year ended December 31, 2022. (2 marks) d) Translate COVID's statement of financial position as at December 31 , 2022. Provide a reconciliation of the cumulative translation adjustment figure. (13 marks) Sweet Aroma Relaxation Services Inc. (SARS) is a Canadian company. Its functional and reporting currency is the Canadian dollar. SARS purchased 100% of the common shares of Chiapas Olfactory Identification Inc. (COVID), a Mexican company, on December 31, 2019. COVID's comparative statement of financial position as at December 31, 2022, and statement of comprehensive income for the year ended December 31, 2022, follow, (in Mexican Peso - MX): Chiapas Olfactory Identification Inc. Statement of financial position As at December 31 Chiapas Olfactory Identification Inc. Statement of comprehensive income Eartha wanne andand namamhar 21 m3? Additional information: 1. Both companies report their financial results in accordance with IFRS and have a common year end of December 31 . 2. COVID's sales were made, and other expenses incurred, evenly throughout year. 3. COVID uses the FIFO cost formula to value its inventories. 4. COVID purchased MX 30,200,000 of inventory on January 1,2022 , MX 11,729,000 of inventory on July 1,2022 , and MX 12,608,000 on December 15, 2022. The closing inventory on December 31, 2021, was purchased on December 31, 2021. 5. The plant, equipment and land assets reported on COVID's statement of financial position as at December 31, 2021, were all acquired on December 31,2018 . COVID purchased an additional MX 700,000 of equipment on January 1, 2022 and brought it into use on that date. All plant and equipment is depreciated on a straight-line basis over five years. These assets have no residual value for purposes of depreciation. 6. COVID declared dividends on December 15,2022 . The dividends were paid on December 31, 2022. 7. The Canadian dollar equivalent of COVID's retained earnings as at December 31, 2021, was C $2,139,453. 8. Significant exchange rates: December 31, 2018 MX1.00=C$0.072 December 31, 2019 MX1.00=C$0.070 December 31, 2020 MX1.00=C$0.069 December 31, 2021 MX1.00=C$0.067 January 1, 2022 MX1.00=C$0.068 July1,2022December15,2022MX1.00=C$0.066MX1.00=C$0.065 December 31, 2022 MX 1.00=C$0.064 Average rate for 2021MX1.00=C$0.0685 Average rate for 2022MX1.00=C$0.0665 Assume that COVID's functional currency is the Mexican Peso. The balance in the cumulative translation adjustment account included in accumulated other comprehensive income (AOCl) as at December 31, 2021, was a debit of C$109,350. a) Calculate the foreign exchange gain or loss on COVID's net assets for 2022 and make note of whether it is a gain or a loss. (5 marks) b) Translate COVID's statement of comprehensive income for the year ended December 31, 2022. (5 marks) c) Reconcile the change in COVID's translated retained earnings for the year ended December 31, 2022. (2 marks) d) Translate COVID's statement of financial position as at December 31 , 2022. Provide a reconciliation of the cumulative translation adjustment figure. (13 marks)