Maple Leaf Accessories Ltd. created Bling Accessories Ltd., a foreign subsidiary, on April 1, 20X7. It exchanged FC 250,000 for all the newly issued shares of Bling. On the same day, Bling purchased a tract of land for FC 200,000. This land will be used to build Bling's future headquarters. Bling planned to start operations on July 1, 20X7, but due to some legal issues, it was not able to start operations until January 2, 20X8. On that date, it acquired used machinery and furniture for FC 150,000. Both the machinery and furniture have an expected useful life of six years, with no expected salvage value. Bling's 20X8 ending inventory was purchased on November 22, 20X8. The 20x7 ending inventory was purchased on December 31, 20x7. Bling's long-term bank loan was taken out on December 31, 20x7. Bling's statements of financial position and statement of income are presented as follows: Bling Accessories Ltd. Statement of Financial Position As of December 31 in FC) 20X8 20X7 Assets: Noncurrent assets: Land 200,000 200,000 Machinery and furniture 150,000 Accumulated depreciation (25,000) 125,000 325,000 200,000 Current assets: Inventory 50,000 100,000 Accounts receivable 75,000 Cash and cash equivalents 75,000 100,000 200,000 200,000 525,000 400,000 Shareholders' equity: Common shares 250,000 250,000 Retained earnings 40,000 290,000 250,000 Liabilities: Noncurrent liabilities: Long-term bank loan 125,000 125,000 Current liabilities: Accounts payable 110,000 25,000 235,000 150,000 525,000 400,000 Bling Accessories Ltd. Statement of Net and Comprehensive Income For the Year Ended December 31, 20X8 in FC) 300,000 Sales revenue Cost of sales: Opening inventory Purchases Ending inventory 100,000 150,000 (50,000) 200,000 100,000 Expenses: Depreciation Interest Other Net and comprehensive income 25,000 15,000 20,000 60,000 40,000 Selected Exchange Rates: FC1 = April 1, 20X7 $1.00 CDN December 31, 20X7 1.15 CDN January 2, 20X8 1.15 CDN November 22, 20X8 1.225 CDN December 31, 20X8 1.25 CDN Average for 20X8 1.20 CDN Required: a) Prepare a statement of financial position and a statement of net income translated into Canadian dollars using the current rate method ii. temporal method You have the option to use the attached worksheets to prepare your statements. Be sure to properly label them, and show all your work, as partial marks may be awarded. You are not required to use the worksheets. b) Fully explain how to determine which translation method a business should use. Maple Leaf Accessories Ltd. created Bling Accessories Ltd., a foreign subsidiary, on April 1, 20X7. It exchanged FC 250,000 for all the newly issued shares of Bling. On the same day, Bling purchased a tract of land for FC 200,000. This land will be used to build Bling's future headquarters. Bling planned to start operations on July 1, 20X7, but due to some legal issues, it was not able to start operations until January 2, 20X8. On that date, it acquired used machinery and furniture for FC 150,000. Both the machinery and furniture have an expected useful life of six years, with no expected salvage value. Bling's 20X8 ending inventory was purchased on November 22, 20X8. The 20x7 ending inventory was purchased on December 31, 20x7. Bling's long-term bank loan was taken out on December 31, 20x7. Bling's statements of financial position and statement of income are presented as follows: Bling Accessories Ltd. Statement of Financial Position As of December 31 in FC) 20X8 20X7 Assets: Noncurrent assets: Land 200,000 200,000 Machinery and furniture 150,000 Accumulated depreciation (25,000) 125,000 325,000 200,000 Current assets: Inventory 50,000 100,000 Accounts receivable 75,000 Cash and cash equivalents 75,000 100,000 200,000 200,000 525,000 400,000 Shareholders' equity: Common shares 250,000 250,000 Retained earnings 40,000 290,000 250,000 Liabilities: Noncurrent liabilities: Long-term bank loan 125,000 125,000 Current liabilities: Accounts payable 110,000 25,000 235,000 150,000 525,000 400,000 Bling Accessories Ltd. Statement of Net and Comprehensive Income For the Year Ended December 31, 20X8 in FC) 300,000 Sales revenue Cost of sales: Opening inventory Purchases Ending inventory 100,000 150,000 (50,000) 200,000 100,000 Expenses: Depreciation Interest Other Net and comprehensive income 25,000 15,000 20,000 60,000 40,000 Selected Exchange Rates: FC1 = April 1, 20X7 $1.00 CDN December 31, 20X7 1.15 CDN January 2, 20X8 1.15 CDN November 22, 20X8 1.225 CDN December 31, 20X8 1.25 CDN Average for 20X8 1.20 CDN Required: a) Prepare a statement of financial position and a statement of net income translated into Canadian dollars using the current rate method ii. temporal method You have the option to use the attached worksheets to prepare your statements. Be sure to properly label them, and show all your work, as partial marks may be awarded. You are not required to use the worksheets. b) Fully explain how to determine which translation method a business should use