Q. Waheed Inc. Has a foreign subsidiary that needs to be translated into Canadian dollars. The financial statements are as follows:

Balance Sheet - December 31, 2003. Local Currency (LC)

Cash LC 150,000

Accounts receivable 225,000

Merchandise inventory 60,000

Fixed assets (net) 400,000

LC 835,000

Current liabilities LC 200,000

Long-term debt 250,000

Common stock 310,000

Retained earnings 75,000

LC 835,000

Statement of Income and Retained Earnings for the Year Ended December 31, 03

Local Currency (LC)

Sales LC 600,000

Cost of goods sold 250,000

Gross profit 350,000

Depreciation expense 55,000

Other expense 105,000

Total expenses 160,000

Income before tax 190,000

Income tax 90,000

Net income 100,000

Retained earnings 1/1/03 20,000

Dividends -45,000

Retained earnings 12/31/03 LC 75,000

The following are exchange rates per unit of LC:

At 12/31/03 $1.40

When fixed assets were acquired, long-term debt incurred, and capital stock sold 1.80

Average for 03 1.50

At 7/1/03 1.60

At 10/1/03 1.65

For 03 beginning inventory 1.70

For 03 ending inventory 1.55

Additional information: Revenues, expenses, and inventory purchases were incurred uniformly during the year. Dividends were paid in equal amount on 7/1 and 10/1. The retained earnings balance 1/1/03 was Canadian $15,000. Beginning inventory was LC 50,000 and ending inventory was LC 60,000. Required:

(1) Translate the financial statements using the current rate method.

(2) Translate the financial statements using the temporal method