PL Corporation has a December 31, 2005, year-end. The company submitted a purchase order for US$30,000 of equipment on July 1, 2005, when the exchange rate was C$1.00 = US$0.6500. It received the equipment on September 30, 2005, when the exchange rate was C$1.00 = US$0.6667. The company paid US$20,000 to the supplier on December 1, 2005, when the exchange rate was US$0.6900. On December 31, 2005, the exchange rate was US$0.7000. The company uses straight-line amortization commencing in the month following the acquisition. The equipment is expected to last five years.

Required:

a. What would be the net book value of PL’s equipment on its December 31, 2005, balance sheet?

b. What will be the balance of the account payable on PL’s December 31, 2005, balance sheet?