On December 31, 2011, Sask Company, a Canadian company, purchased 60% of the outstanding common shares of Alto Limited for ‚¬7 million. Alto was incorporated in France and operates primarily in that country. The condensed financial statements for Alto for 2013 were as follows:

Additional information:
1. Inventory was purchased as follows:
Beginning inventory (purchased in fourth quarter of 2012) ....‚¬ 3,600,000
Purchases (purchased evenly throughout the year) ....... 14,600,000
Ending inventory (purchased in fourth quarter of 2013) ..... 3,400,000
2. The equipment was purchased for ‚¬12 million on January 1, 2010. It is being depreciated on a straight-line basis over eight years.
3. Sales and other expenses occurred evenly throughout the year.
4. Dividends were declared on December 15, 2013, and paid on December 31, 2013.

January 1, 2010 ………………………..        €1 = C$1.70

December 31, 2011 …………………….       €1 = C$1.36

Average for quarter 4 for 2012 …………      €1 = C$1.35

December 31, 2012 …………………….       €1 = C$1.34

December 15, 2013 …………………….       €1 = C$1.31

Average for quarter 4 for 2013 ………..        €1 = C$1.32

Average for 2013 …………………….          €1 = C$1.33

December 31, 2013 …………………….       €1 = C$1.30

6. Alto's translated financial statements will be used by Sask when it prepares consolidated financial statements. Alto's functional currency is the Canadian dollar (that is, Alto is an integrated foreign operation per ASPE). The translated retained earnings at the beginning of 2013 in Canadian dollars were $6,656,960.
Required
(a) Prepare a schedule to calculate the foreign exchange gain or loss to be reported by Alto on its Canadian-dollar income statement for 2013.
(b) Translate Alto's statement of income and retained earnings for 2013 into Canadian dollars.

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ALTO LIMITED Balance Sheet December 31 Monetary assets Inventory Equipment-net Total 2013 4,004,000 3,400,000 6,000,000 13,404,000 2012 1,844,000 3,600,000 7,500,000 12,944,000 Monetary liabilities Common shares Retained earnings Total E 7,300,000 1,000,000 5,104,000 13,404,000 7,100,000 1,000,000 4,844,000 12,944,000 ALTO LIMITED Statement of Income and Retained Earnings year ended December 31, 2013 23,520,000 14,800,000 8,720,000 1,500,000 6,460,000 760,000 4,844,000 (500,000) 5,104,000 Sales Cost of sales Gross profit Depreciation expense Other expenses Net income Retained earnings, beginning of year Dividends paid Retained earnings, end of year