Sendelbach Corporation is a U.S.-based organization with operations throughout the world. One of its subsidiaries is headquartered in Toronto. Although this wholly owned company operates primarily in Canada, it engages in some transactions through a branch in Mexico. Therefore, the subsidiary maintains a ledger denominated in Mexican pesos (Ps) and a general ledger in Canadian dollars (C$). As of December 31, 2020, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows:

Additional Information

• The Canadian subsidiary?s functional currency is the Canadian dollar, and Sendelbach?s reporting currency is the U.S. dollar. The Canadian and Mexican operations are not viewed as separate accounting entities.

• The building and equipment used in the Mexican operation were acquired in 2010 when the currency exchange rate was C$0.25 = Ps 1.

• Purchases of inventory were made evenly throughout the fiscal year.

• Beginning inventory was acquired evenly throughout 2019; ending inventory was acquired evenly throughout 2020.

• The Main Office account on the Mexican records should be considered an equity account. This balance was premeasured into C$7,980 on December 31, 2020.

• Currency exchange rates for 1 Ps applicable to the Mexican operation follow:

• The December 31, 2019, consolidated balance sheet reported a cumulative translation adjustment with a $47,950 credit (positive) balance.

• The subsidiary?s common stock was issued in 2007 when the exchange rate was $0.40 = C$1.

• The subsidiary?s December 31, 2019, retained earnings balance was C$146,590, an amount that has been translated into U.S.$72,963.

• The applicable currency exchange rates for 1 C$ for translation purposes are as follows:

1. Re-measure the Mexican operation?s account balances into Canadian dollars. (Note: Back into the beginning net monetary asset or liability position.)

2. Prepare financial statements (income statement, statement of retained earnings, and balance sheet) for the Canadian subsidiary in its functional currency, Canadian dollars.

3. Translate the Canadian dollar functional currency financial statements into U.S. dollars so that Sendelbach can prepare consolidated financial statements.

b. Prepare financial statements (income statement, statement of retained earnings, and balance sheet) for the Canadian subsidiary in its functional currency, Canadian dollars.c. Translate the Canadian dollar functional currency financial statements into U.S. dollars so that Sendelbach can prepare consolidated financial statements.

(Round U.S. Dollar values to 2 decimal places. Amounts to be deducted and losses should be indicated with a minus sign.)

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Accounts payable Accumulated depreciation Buildings and equipment Cash Common stock Cost of goods sold Depreciation expense Main Operation-Canada Dividends, 4/1/20 Gain on sale of equipment, 6/1/20 Inventory Notes payable-due in 2023 Receivables Retained earnings, 1/1/20 Salary expense Sales Utility expense Branch operation Totals Accounts payable Accumulated depreciation Building and equipment Cash Salary expense Sales Main office Depreciation expense Inventory (beginning-income statement) Inventory (ending-income statement) Inventory (ending-balance sheet) Purchases Receivables Totals Branch Operation-Mexico C$ 178,000 37,000 Debit 90,000 79,000 34,000 10,100 7,980 C$ 688,080 Ps 214,000 8,000 30,000 Debit 51,000 64,500 3,100 34,000 33,500 68,000 32,000 10,100 Ps 296, 200 Credit C$ 33,390 38,000 61,000 Ps 6,100 80,000 146,590 323,000 C$ 688,080 Credit 60,600 36,100 33,500 135,000 31,000 Ps 296, 200 Weighted average, 2019 January 1, 2020 Weighted average rate for 2020 December 31, 2020 C$ 0.30 0.32 0.34 0.35 January 1, 2020 April 1, 2020 June 1, 2020 Weighted average rate for 2020 December 31, 2020 US$ 0.70 0.69 0.68 0.67 0.65 Req A Remeasure the Mexican operation's account balances into Canadian dollars. (Note: Back into the beginning net monetary asset or liability position.) (Input all amounts as positive values.) Req B and C Accounts payable Accumulated depreciation Building and equipment Cash Depreciation expense Inventory (beginning-income statement) Inventory (ending-income statement) Inventory (ending-balance sheet) Purchases Receivables Salary expense Sales Main office Total Canadian Dollars Credit Debit < Req A Req B and C > Income Statement: Statement of Retained Earnings: Retained earnings, 1/1/20 SENDELBACH CORPORATION Financial Statements For the Year Ended December 31, 2020 Canadian Dollar Retained earnings, 12/31/20 Balance Sheet: Total Total Assets: Liabilities and Equities: CS C$ CS CS 3 C$ CS C$ C$ CS U.S. Dollar Accounts payable Accumulated depreciation Buildings and equipment Cash Common stock Cost of goods sold Depreciation expense Main Operation-Canada Dividends, 4/1/20 Gain on sale of equipment, 6/1/20 Inventory Notes payable-due in 2023 Receivables Retained earnings, 1/1/20 Salary expense Sales Utility expense Branch operation Totals Accounts payable Accumulated depreciation Building and equipment Cash Salary expense Sales Main office Depreciation expense Inventory (beginning-income statement) Inventory (ending-income statement) Inventory (ending-balance sheet) Purchases Receivables Totals Branch Operation-Mexico C$ 178,000 37,000 Debit 90,000 79,000 34,000 10,100 7,980 C$ 688,080 Ps 214,000 8,000 30,000 Debit 51,000 64,500 3,100 34,000 33,500 68,000 32,000 10,100 Ps 296, 200 Credit C$ 33,390 38,000 61,000 Ps 6,100 80,000 146,590 323,000 C$ 688,080 Credit 60,600 36,100 33,500 135,000 31,000 Ps 296, 200 Weighted average, 2019 January 1, 2020 Weighted average rate for 2020 December 31, 2020 C$ 0.30 0.32 0.34 0.35 January 1, 2020 April 1, 2020 June 1, 2020 Weighted average rate for 2020 December 31, 2020 US$ 0.70 0.69 0.68 0.67 0.65 Req A Remeasure the Mexican operation's account balances into Canadian dollars. (Note: Back into the beginning net monetary asset or liability position.) (Input all amounts as positive values.) Req B and C Accounts payable Accumulated depreciation Building and equipment Cash Depreciation expense Inventory (beginning-income statement) Inventory (ending-income statement) Inventory (ending-balance sheet) Purchases Receivables Salary expense Sales Main office Total Canadian Dollars Credit Debit < Req A Req B and C > Income Statement: Statement of Retained Earnings: Retained earnings, 1/1/20 SENDELBACH CORPORATION Financial Statements For the Year Ended December 31, 2020 Canadian Dollar Retained earnings, 12/31/20 Balance Sheet: Total Total Assets: Liabilities and Equities: CS C$ CS CS 3 C$ CS C$ C$ CS U.S. Dollar

Answer rating: 100% (QA)

a The temporal method will be used for the Remeasurement of funds from Mexican currency into Canadian currency Determine the remeasured amounts using the appropriate exchange rates as follows Remeasur... View the full answer