Sendelbach Corporation is a U.S.âbased 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$). As of December 31, 2015, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows:
Main OperationâCanada Debit Credit Accounts payable C$ 39,605 Accumulated depreciation 41,000 Buildings and equipment C$ 181,000 Cash 40,000 Common stock 64,000 Cost of goods sold 217,000 Depreciation expense 8,300 Dividends, 4/1/15 33,000 Gain on sale of equipment, 6/1/15 6,400 Inventory 93,000 Notes payableâdue in 2018 83,000 Receivables 82,000 Retained earnings, 1/1/15 149,590 Salary expense 37,000 Sales 326,000 Utility expense 10,400 Branch operation 7,895 Totals C$ 709,595 C$ 709,595
Branch OperationâMexico Debit Credit Accounts payable Ps 64,900 Accumulated depreciation 39,900 Building and equipment Ps 54,000 Cash 66,000 Depreciation expense 3,400 Inventory (beginningâincome statement) 37,000 Inventory (endingâincome statement) 35,000 Inventory (endingâbalance sheet) 35,000 Purchases 71,000 Receivables 35,000 Salary expense 10,400 Sales 138,000 Main office 34,000 Totals Ps 311,800 Ps 311,800
Additional Information
⢠The Canadian subsidiaryâs functional currency is the Canadian dollar, and Sendelbachâs 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 2005 when the currency exchange rate was C$0.22 = Ps 1.
⢠Purchases should be assumed as having been made evenly throughout the fiscal year. ⢠Beginning inventory was acquired evenly throughout 2014; ending inventory was acquired evenly throughout 2015.
⢠The Main Office account on the Mexican records should be considered an equity account. This balance was remeasured into C$7,895 on December 31, 2015.
⢠Currency exchange rates for 1 Ps applicable to the Mexican operation follow:
Weighted average, 2014 C$ 0.27 January 1, 2015 0.29 Weighted average rate for 2015 0.31 December 31, 2015 0.32
⢠The December 31, 2014, consolidated balance sheet reported a cumulative translation adjustment with a $50,950 credit (positive) balance.
⢠The subsidiaryâs common stock was issued in 2004 when the exchange rate was $0.43 = C$1.
⢠The subsidiaryâs December 31, 2014, Retained Earnings balance was C$149,590.00, a figure that has been translated into US$71,043.
⢠The applicable currency exchange rates for 1 C$ for translation purposes are as follows:
January 1, 2015 US$ 0.70 April 1, 2015 0.69 June 1, 2015 0.68 Weighted average rate for 2015 0.67 December 31, 2015 0.65
a. Remeasure the Mexican operationâs figures into Canadian dollars. (Hint: Back into the beginning net monetary asset or liability position.) (Input all amounts as positive values.)
Canadian Dollars Debit Credit Accounts payable 20,768 Accumulated depreciation 8,778 Building and equipment 11,880 Cash 21,120 Depreciation expense 748 Inventory (beginningâincome statement) 9,990 Inventory (endingâincome statement) 10,850 Inventory (endingâbalance sheet) 10,850 Purchases 22,010 Receivables 11,200 Salary expense 3,224 Sales 42,780 Main office 7,895 Remeasurement loss 49 Total 91,071 91,071
b.
Prepare financial statements (income statement, statement of retained earnings, and balance sheet) for the Canadian subsidiary in its functional currency and Prepare consolidated financial statement in parent currency (that is U.S. dollars). (Round U.S. Dollar values to 2 decimal places. Amounts to be deducted and losses should be indicated with a minus sign.)
SENDELBACH CORPORATION Financial Statements For the Year Ended December 31, 2015 Canadian Dollar U.S. Dollar Income Statement: Sales C$ 368,780 Cost of goods sold Gross profit C$ 368,780 $0.00 Salary expense Utility expense Depreciation expense Gain on sale of equipment Remeasurement loss Net income C$ 368,780 $0.00 Statement of Retained Earnings: Retained earnings, 1/1/15 C$ Net income Dividends Retained earnings, 12/31/15 C$ 0 $0.00 Balance Sheet: Assets: Cash C$ Receivables Inventory Buildings and equipment Accumulated depreciation Total assets C$ 0 $0.00 Liabilities and Equities: Accounts payable C$ Notes payable Common stock Retained earnings Total liabilities and equities C$ 0 $0.00
I figured out part A but need help with part B please!
Thank you in advance!!!
Sendelbach Corporation is a U.S.âbased organization with operations throughout the world. One of its subsidiaries is headquartered in Toronto. Although this wholly owned company operates primarily in Canada, it engages in some transactions through a branch in Mexico. Therefore, the subsidiary maintains a ledger denominated in Mexican pesos (Ps) and a general ledger in Canadian dollars (C$). As of December 31, 2015, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows: |
Main OperationâCanada | ||
Debit | Credit | |
Accounts payable | C$ 39,605 | |
Accumulated depreciation | 41,000 | |
Buildings and equipment | C$ 181,000 | |
Cash | 40,000 | |
Common stock | 64,000 | |
Cost of goods sold | 217,000 | |
Depreciation expense | 8,300 | |
Dividends, 4/1/15 | 33,000 | |
Gain on sale of equipment, 6/1/15 | 6,400 | |
Inventory | 93,000 | |
Notes payableâdue in 2018 | 83,000 | |
Receivables | 82,000 | |
Retained earnings, 1/1/15 | 149,590 | |
Salary expense | 37,000 | |
Sales | 326,000 | |
Utility expense | 10,400 | |
Branch operation | 7,895 | |
Totals | C$ 709,595 | C$ 709,595 |
Branch OperationâMexico | ||
Debit | Credit | |
Accounts payable | Ps 64,900 | |
Accumulated depreciation | 39,900 | |
Building and equipment | Ps 54,000 | |
Cash | 66,000 | |
Depreciation expense | 3,400 | |
Inventory (beginningâincome statement) | 37,000 | |
Inventory (endingâincome statement) | 35,000 | |
Inventory (endingâbalance sheet) | 35,000 | |
Purchases | 71,000 | |
Receivables | 35,000 | |
Salary expense | 10,400 | |
Sales | 138,000 | |
Main office | 34,000 | |
Totals | Ps 311,800 | Ps 311,800 |
Additional Information |
⢠| The Canadian subsidiaryâs functional currency is the Canadian dollar, and Sendelbachâs 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 2005 when the currency exchange rate was C$0.22 = Ps 1. |
⢠| Purchases should be assumed as having been made evenly throughout the fiscal year. |
⢠| Beginning inventory was acquired evenly throughout 2014; ending inventory was acquired evenly throughout 2015. |
⢠| The Main Office account on the Mexican records should be considered an equity account. This balance was remeasured into C$7,895 on December 31, 2015. |
⢠| Currency exchange rates for 1 Ps applicable to the Mexican operation follow: |
Weighted average, 2014 | C$ | 0.27 |
January 1, 2015 | 0.29 | |
Weighted average rate for 2015 | 0.31 | |
December 31, 2015 | 0.32 | |
⢠| The December 31, 2014, consolidated balance sheet reported a cumulative translation adjustment with a $50,950 credit (positive) balance. |
⢠| The subsidiaryâs common stock was issued in 2004 when the exchange rate was $0.43 = C$1. |
⢠| The subsidiaryâs December 31, 2014, Retained Earnings balance was C$149,590.00, a figure that has been translated into US$71,043. |
⢠| The applicable currency exchange rates for 1 C$ for translation purposes are as follows: |
January 1, 2015 | US$ | 0.70 |
April 1, 2015 | 0.69 | |
June 1, 2015 | 0.68 | |
Weighted average rate for 2015 | 0.67 | |
December 31, 2015 | 0.65 | |
a. | Remeasure the Mexican operationâs figures into Canadian dollars. (Hint: Back into the beginning net monetary asset or liability position.) (Input all amounts as positive values.)
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