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Beach Bean Company $($BBC$)$ is a subsidiary of Common Grounds Inc $($CGI$),$ a Canadian company that reports in Canadian dollars. BBC is located on the Island of Kauai in the United States. On December $31,2020,$ CGI purchased $85\%$ of the common shares of BBC for USD $$1,250,000.$ The following appears on the BBC financial statements for the year ending December $31,2025$:

Beach Bean Company

Statement of Income

For the Year Ending December $31,2025$

$($in USD$)$

Sales

$ $3,650,000$

Cost of sales

$1,642,000$

Gross margin

$2,008,000$

Gain on sale of equipment

$50,000$

Expenses:

Depreciation expense

$365,000$

Other expense

$950,000$

Net income

$ $743,000$

Beach Bean Company

Partial Statement of Financial Position

As at December $31,2025$

$($in USD$)$

$($in USD$)$

$2025$

$2024$

Cash

$ $1,055,000$

$ $675,000$

Accounts receivable

$1,290,000$

$1,035,000$

Inventory

$895,000$

$850,000$

Inventory on hand at the end of the year was purchased evenly throughout the last quarter of the year.

The relevant exchange rates for USD $1$ to the Canadian dollar:

Average rate$$month of December$2024$

$1\mathrm{.}235$

Average rate$$last quarter of $2024$

$1\mathrm{.}245$

December $31,2024$

$1\mathrm{.}260$

August $14,2025$

$1\mathrm{.}270$

Average rate$$yearly$2025$

$1\mathrm{.}273$

December $31,2025$

$1\mathrm{.}285$

Average rate$$month of December

$1\mathrm{.}280$

Average rate$$last quarter of $2025$

$1\mathrm{.}266$

Assuming that BBC$\text{'}$s functional currency is the Canadian dollar, which of the following is the balance in Canadian dollars for Cost of sales for $2025?$

Question $14$ options:

$$2,075,416$

$$2,060,130$

$$2,073,626$

$$2,072,731$

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