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, 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 Operation—Canada
Debit Credit
Accounts payable C$ 13,860
Accumulated depreciation 29,000
Buildings and equipment C$ 169,000
Cash 28,000
Common stock 52,000
Cost of goods sold 205,000
Depreciation expense 7,100
Dividends, 4/1/15 21,000
Gain on sale of equipment, 6/1/15 5,200
Inventory 81,000
Notes payable—due in 2018 71,000
Receivables 70,000
Retained earnings, 1/1/15 137,590
Salary expense 25,000
Sales 314,000
Utility expense 9,200
Branch operation 7,350
Totals C$ 622,650 C$ 622,650
Branch Operation—Mexico
Debit Credit
Accounts payable Ps 54,200
Accumulated depreciation 19,200
Building and equipment Ps 42,000
Cash 60,000
Depreciation expense 2,200
Inventory (beginning—income statement) 25,000
Inventory (ending—income statement) 29,000
Inventory (ending—balance sheet) 29,000
Purchases 70,000
Receivables 23,000
Salary expense 9,200
Sales 126,000
Main office 32,000
Totals Ps 260,400 Ps 260,400
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 2005 when the currency exchange rate was C$0.23 = 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$7,350 on December 31, 2015.

• Currency exchange rates for 1 Ps applicable to the Mexican operation follow:
Weighted average, 2014 C$ 0.28
January 1, 2015 0.30
Weighted average rate for 2015 0.32
December 31, 2015 0.33
•
The December 31, 2014, consolidated balance sheet reported a cumulative translation adjustment with a $38,950 credit (positive) balance.

• The subsidiary’s common stock was issued in 2004 when the exchange rate was $0.47 = C$1.
•
The subsidiary’s December 31, 2014, Retained Earnings balance was C$137,590.00, a figure that has been translated into US$69,323.

• 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

Remeasure the Mexican operation’s figures into Canadian dollars. (Hint: Back into the beginning net monetary asset or liability position.) (Input all amounts as positive values.)

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.)