Sendelbach Corporation is a U.S.-based organization with operations throughout the world. One of its subsidiaries is hea

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Sendelbach Corporation Is A U S Based Organization With Operations Throughout The World One Of Its Subsidiaries Is Hea 1 (45.79 KiB) Viewed 59 times

Sendelbach Corporation Is A U S Based Organization With Operations Throughout The World One Of Its Subsidiaries Is Hea 2 (36.7 KiB) Viewed 59 times

Sendelbach Corporation Is A U S Based Organization With Operations Throughout The World One Of Its Subsidiaries Is Hea 3 (14.42 KiB) Viewed 59 times

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$). As of December 31, 2020, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows: Main Operation-Canada Debit Credit 29,105 Accounts payable Accumulated depreciation 37,000 C$ 177,000 Buildings and equipment Cash 36,000 Common stock 60,000 Cost of goods sold 213,000 Depreciation expense 7,900 Dividends, 4/1/20 29,000 Gain on sale of equipment, 6/1/20 6,000 Inventory 89,000 Notes payable-due in 2023 79,000 Receivables 78,000 Retained earnings, 1/1/20 145,590 Salary expense 33,000 Sales 322,000 10,000 Utility expense Branch operation 5,795 Totals C$ 678,695 C$ 678,695
Branch Operation-Mexico Ps Debit Credit Accounts payable Ps 47,500 19,500 Accumulated depreciation 50,000 Building and equipment Cash 64,000 Depreciation expense 3,000 33,000 33,000 Inventory (beginning-income statement) Inventory (ending-income statement) Inventory (ending-balance sheet) Purchases 33,000 50,000 Receivables 31,000 Salary expense Sales 10,000 134,000 40,000 Main office Totals Ps 274,000 Ps 274,000 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$0.15 = 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$5,795 on December 31, 2020. ● Currency exchange rates for 1 Ps applicable to the Mexican operation follow:
C$ 0.20 Weighted average, 2019 January 1, 2020 0.22 Weighted average rate for 2020 0.24 December 31, 2020 0.25 • The December 31, 2019, consolidated balance sheet reported a cumulative translation adjustment with a $46,950 credit (positive) balance. • The subsidiary's common stock was issued in 2007 when the exchange rate was $0.55 = C$1. ● The subsidiary's December 31, 2019, retained earnings balance was C$145,590, an amount that has been translated into U.S.$63,963. • The applicable currency exchange rates for 1 C$ for translation purposes are as follows: January 1, 2020 US$ 0.70 April 1, 2020 0.69 June 1, 2020 0.68 Weighted average rate for 2020 0.67 December 31, 2020 0.65
a. Remeasure the Mexican operation's account balances into Canadian dollars. (Note: Back into the beginning net monetary asset or liability position.) b. Prepare financial statements (income statement, statement of retained earnings, and balance sheet) for the Canadian subsidiary in its functional currency, Canadian dollars. c. Translate the Canadian dollar functional currency financial statements into U.S. dollars so that Sendelbach can prepare consolidated financial statements. Complete this question by entering your answers in the tabs below. Req A Req B and C Remeasure the Mexican operation's account balances into Canadian dollars. (Note: Back into the beginning net monetary asset or liability position.) (Input all amounts as positive values.)
Req A Req B and C Remeasure the Mexican operation's account balances into Canadian dollars. (Note: Back into the beginning net monetary asset or liability position.) (Input all amounts as positive values.) Canadian Dollars Debit Credit Accounts payable Accumulated depreciation Building and equipment Cash Depreciation expense Inventory (beginning-income statement) Inventory (ending-income statement) Inventory (ending-balance sheet) Purchases Receivables Salary expense Sales Main office Total 0
b. Prepare financial statements (income statement, statement of retained earnings, and balance sheet) for the Canadian subsidiary in its functional currency, Canadian dollars. c. Translate the Canadian dollar functional currency financial statements into U.S. dollars so that Sendelbach can prepare consolidated financial statements. (Round U.S. Dollar values to 2 decimal places. Amounts to be deducted and losses should be indicated with a minus sign.) Show less SENDELBACH CORPORATION Financial Statements For the Year Ended December 31, 2020 Canadian Dollar U.S. Dollar Income Statement: Statement of Retained Earnings: Retained earnings, 1/1/20 C$ C$ C$ C$ 0 $ 0 $ 0.00 0.00
Retained earnings, 12/31/20 Balance Sheet: Assets: Total Liabilities and Equities: Total C$ C$ C$ C$ C$ 0 $ 0 $ 0 $ 0.00 0.00 0.00