On January 1, 20X5, Pierre Company of Sherbrooke, Quebec, purchased 80% of the outstanding shares of Simon Limited of Switzerland for CHF200,000. Simon€™s statements of financial position as at December 31, 20X4, and December 31, 20X5, and Simon€™s 20X5 statement of comprehensive income and retained earnings follow.

Simon Ltd.
Statement of Comprehensive Income and Retained Earnings
Year Ended December 31, 20X5

Sales...............................................................................................CHF500,000
Cost of sales.......................................................................................(280,000)
Amortization........................................................................................(50,000)
Other expenses...................................................................................(20,000)
Net income..........................................................................................150,000
Retained earnings, January 1, 20X5....................................................95,000
..............................................................................................................245,000
Dividends paid......................................................................................70,000
Retained earnings, December 31, 20X5...................................CHF175,000

Additional Information

1. Simon was incorporated on January 1, 20X2, at which time it acquired all of its equipment and issued its 10-year bonds.

2. Simon€™s purchases and sales occurred evenly during 20X5. Simon€™s December 31, 20X4, and December 31, 20X5, inventory was acquired evenly over the final six months of 20X4 and 20X5, respectively.

3. Dividends were paid on July 1, 20X5.

4. The carrying values of Simon€™s identifiable assets and liabilities approximated fair values. Any purchase price discrepancy should be assigned to goodwill. Ignore income taxes.

5. Foreign exchange rates were as follows:

January 1, 20X2...............................................................CHF1 = C$0.90
Average for July€“December 20X4.................................CHF1 = C$0.92
December 31, 20X4/January 1, 20X5............................CHF1 = C$0.94
July 1, 20X5......................................................................CHF1 = C$0.98
December 31, 20X5........................................................CHF1 = C$1.02
Average for July€“December 20X5.................................CHF1 = C$1.00
Average for 20X5............................................................CHF1 = C$0.99

Required
a. Translate the financial statements of Simon as at December 31, 20X5, assuming that Simon€™s functional currency is the Swiss franc. Include a separate calculation of any translation gain or loss on the fair value increment related to goodwill.

b. Translate the financial statements of Simon for the year ended December 31, 20X5, assuming that Simon€™s functional currency is the Canadian dollar.

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Simon Ltd. Statement of Financial Position December 31 20X5 20X4 Assets CHF 50,000 Cash CHF120,000 Accounts receivable 75,000 85,000 Inventory Equipment, net 80,000 60,000 250,000 300,000 CHF485,000 CHF535,000 Liabilities and shareholders' equity Accounts payable CHF 90,000 CHF 60,000 Bonds payable 200,000 200,000 Common shares 100,000 100,000 Retained earnings 175,000 95,000 CHF485,000 CHF535,000