On December 31, 20X3, Oak Company (Oak), a Canadian corporation, purchased 100% of the outstanding common shares of Maple Limited (Maple). Maple was incorporated on January 2, 20X0, and began operations immediately in the southwestern United States. Common shares were issued on the date of incorporation and no more common shares have been issued since then. The SFP for Maple at December 31, 20X9, was as follows:
Maple Limited
Statement of Financial Position
December 31, 20X9
Cash.................................................................................................................... US$ 100,000
Accounts receivable (note 1).............................................................................. 200,000
Inventory (note 2)............................................................................................... 300,000
Equipment-net (note 3)....................................................................................... 1,100,000
............................................................................................................................US$ 1,700,000
Accounts payable................................................................................................ US$ 250,000
Bonds payable (note 4)....................................................................................... 700,000
Common shares................................................................................................... 100,000
Retained earnings................................................................................................ 650,000
........................................................................................................................... US$ 1,700,000
Other Information
1. The accounts receivable relating to sales occurred evenly throughout the month of December 20X9.
2. Maple uses the FIFO method to account for its inventory. The inventory available for sale during the year was purchased as follows:

3. The equipment was purchased on May 26, 20X3.
4. Bonds of US$ 700,000 were issued on May 26, 20X3, to finance the purchase of the equipment.
5. Maple reported net income of US$ 200,000, which was earned evenly throughout the year, and paid dividends of US$ 160,000 on July 1, 20X9.
6. Foreign exchange rates were as follows:
January 2, 20X0......................................................................................... US$ 1.00 = C$ 1.05
May 26, 20X3............................................................................................ US$ 1.00 = C$ 1.15
December 31, 20X3................................................................................... US$ 1.00 = C$ 1.17
December 31, 20X8................................................................................... US$ 1.00 = C$ 1.31
July 1, 20X9.............................................................................................. US$ 1.00 = C$ 1.36
December 31, 20X9................................................................................. US$ 1.00 = C$ 1.40
Average for December 20X9................................................................... US$ 1.00 = C$ 1.39 Average for 20X9..................................................................................... US$ 1.00 = C$ 1.34

Required
1. Translate the SFP of Maple at December 31, 20X9, into Canadian dollars using the temporal method. Assume the translated SFP will be consolidated with Oak€™s SFP. For retained earnings, simply use the amount required to balance your SFP.
2. Calculate the foreign exchange gain or loss on the bonds payable for the year ended December 31, 20X9.
3. Prepare an independent calculation of the translation gain or loss for 20X9, assuming that Maple€™s functional currency is the US dollar.
4. €œSince the current- rate method uses the current rate to translate capital assets, the translated amount should represent the current value of the capital assets in Canadian dollars.€ Is this a valid statement? Brieflyexplain.

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Date of Purchase December 31, 20X8 March 1, 20X9 November 1, 20x9 Exchange Rate US$1.00C$1.31 US$ 1.00 C$ 1.35 US$1.00 ($1.38 Cost of Purchase US$ 100,000 1,000,000 180,000