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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$$).$ As of December $31,2020,$ the subsidiary is preparing financial statements in anticipation of consolidation with the U$.$S$.$ parent corporation. Both ledgers for the subsidiary are as follows: $\backslash$table$[[$Main Operation$-$Canada$],[,$Debit,Credit$],[$Accounts payable,,C$$35,000],[$Accumulated depreciation,,$27,000],[$Buildings and equipment,C$ $167,000,],[$Cash$,26,000,],[$Common stock,,$50,000],[$Cost of goods sold,$203,000,],[$Depreciation expense,$8,000,],[$Dividends$,4/1/20,28,000,],[$Gain on sale of equipment, $6/1/20,,5,000],[$Inventory$,98,000,],[$Notes payable$-$due in $2023,,76,000],[$Receivables$,68,000,],[$Retained earnings, $1/1/20,,135,530],[$Salary expense,$26,000,],[$Sales$,,312,000],[$Utility expense,$9,000,],[$Branch operation,$7,530,],[$Totals$,$C$$640,530,$C$$640,530]]$

$\backslash$table$[[$Branch Operation$-$Mexico$],[,$Debit,,Credit$],[$Accounts payable,,Ps$,49,000,],[$Accumulated depreciation,,,$19,000],[$Building and equipment,Ps $40,000,,],[$Cash$,59,000,,],[$Depreciation expense,$2,000,,],[$Inventory $($beginning$-$income statement$),23,000,,],[$Inventory $($ending$-$income statement$),,,28,000],[$Inventory $($ending$-$balance sheet$),28,000,,],[$Purchases$,68,000,,],[$Receivables$,21,000,,],[$Salary expense,$9,000,,],[$Sales$,,,124,000],[$Main office,,,$30,000],[$Totals$,$Ps $250,000,\backslash$bar $($Ps$),250,000]]$

Main Operation$$Canada

Debit Credit

Accounts payable C$ $35,000$

Accumulated depreciation $27,000$

Buildings and equipment C$ $167,000$

Cash $26,000$

Common stock $50,000$

Cost of goods sold $203,000$

Depreciation expense $8,000$

Dividends, $4/1/2028,000$

Gain on sale of equipment, $6/1/205,000$

Inventory $98,000$

Notes payable$$due in $202376,000$

Receivables $68,000$

Retained earnings, $1/1/20135,530$

Salary expense $26,000$

Sales $312,000$

Utility expense $9,000$

Branch operation $7,530$

Totals C$ $640,530$ C$ $640,530$

Branch Operation$$Mexico

Debit Credit

Accounts payable Ps $49,000$

Accumulated depreciation $19,000$

Building and equipment Ps $40,000$

Cash $59,000$

Depreciation expense $2,000$

Inventory $($beginning$$income statement$)23,000$

Inventory $($ending$$income statement$)28,000$

Inventory $($ending$$balance sheet$)28,000$

Purchases $68,000$

Receivables $21,000$

Salary expense $9,000$

Sales $124,000$

Main office $30,000$

Totals Ps $250,000$ Ps $250,000$

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\mathrm{.}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 remeasured into C$$7,530$ on December $31,2020.$

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

Weighted average rate for $2019$ C$ $0\mathrm{.}30$

January $1,20200\mathrm{.}32$

Weighted average rate for $20200\mathrm{.}34$

December $31,20200\mathrm{.}35$

The December $31,2019,$ consolidated balance sheet reported a cumulative translation adjustment with a $$36,950$ credit $($positive$)$ balance.

The subsidiary$$s common stock was issued in $2007$ when the exchange rate was $$0\mathrm{.}45=$ C$$1.$

The subsidiary$$s December $31,2019,$ retained earnings balance was C$$135,530,$ an amount that has been translated into U$.$S$.$$$70,421.$

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

January $1,2020$ US$ $0\mathrm{.}70$

April $1,20200\mathrm{.}69$

June $1,20200\mathrm{.}68$

Weighted average rate for $20200\mathrm{.}67$

December $31,20200\mathrm{.}65$

Remeasure the Mexican operation$$s account balances into Canadian dollars. $($Note: Back into the beginning net monetary asset or liability position.$)$

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

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

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