Looking for help with these two questions. 1. Prepare financial statements (income statement, statement of retained earnings, and balance sheet) for the Canadian subsidiary in its functional currency, Canadian dollars.2. Translate the Canadian dollar functional currency financial statements into U.S. dollars so that Sendelbach can prepare consolidated financial statements. Sendelbach Corporation is a U.S.-based organization with operations throughout the world. One of its subsidiaries is headquartered in Toronto. Although this whollyowned company operates primarily in Canada, it engages in some transactions through a branch in Mexico. Therefore, the subsidiary maintains a ledger denominated inMexican pesos (Ps) and a general ledger in Canadian dollars (C$). As of December 31, 2020, the subsidiary is preparing financial statements in anticipation ofconsolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows:Main Operation-CanadaDebitCreditAccounts payableAccumulated depreciationBuildings and equipmentCash41,55542,000C$182,00041,000C$Common stock65,000Cost of goods soldDepreciation expenseDividends, 4/1/20Gain on sale of equipment, 6/1/20InventoryNotes payable-due in 2023Receivables218,0008,40034,0006,50094,00084,00083,000Retained earnings, 1/1/20Salary expenseSales150,59038,000327,000Utility expenseBranch operation10,5007,745TotalsC$716,645C$716,645Branch Operation-MexicoDebitCreditAccounts payableAccumulated depreciationBuilding and equipmentCash67,50040,000Ps55,00066,5003,50038,000PsDepreciation expenseInventory (beginning-income statement)Inventory (ending-income statement)Inventory (ending-balance sheet)PurchasesReceivables35,50035,50072,00036,00010,500Salary expenseSales139,00035,000Main officeTotalsPs317,000Ps317,000 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 operationsare 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$0.21 = 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 202O.• The Main Office account on the Mexican records should be considered an equity account. This balance was remeasured into C$7,745 on December 31, 202O.Currency exchange rates for 1 Ps applicable to the Mexican operation follow:C$ 0.26Weighted average, 2019January 1, 2020Weighted average rate for 2020December 31, 20200.280.300.31• The December 31, 2019, consolidated balance sheet reported a cumulative translation adjustment with a $51,950 credit (positive) balance.• The subsidiary's common stock was issued in 2007 when the exchange rate was $0.44 = C$1.• The subsidiary's December 31, 2019, retained earnings balance was C$150,590, an amount that has been translated into U.S.$70,363.• The applicable currency exchange rates for 1 C$ for translation purposes are as follows:January 1, 2020April 1, 2020June 1, 2020Weighted average rate for 2020December 31, 2020US$0.700.690.680.670.65

The rate at which one country’s currency can be converted into another country’s currency referred…

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:

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:

Contemporary Auditing

11th Edition

ISBN:9781337650380

Author:KNAPP

Publisher:KNAPP

Chapter8: International Cases

Section8.1: Longtop Financial Technologies Limited

Problem 3Q

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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$). As of December 31, 2020, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows: Main Operation—Canada Debit Credit Accounts payable C$ 21,695 Accumulated depreciation 33,000 Buildings and equipment C$ 173,000 Cash 32,000 Common stock 56,000 Cost of goods sold 209,000 Depreciation expense 7,500 Dividends, 4/1/20 25,000 Gain on sale of equipment, 6/1/20 5,600 Inventory 85,000 Notes…
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$). As of December 31, 2020, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows: Main Operation—Canada Debit Credit Accounts payable C$ 21,695 Accumulated depreciation 33,000 Buildings and equipment C$ 173,000 Cash 32,000 Common stock 56,000 Cost of goods sold 209,000 Depreciation expense 7,500 Dividends, 4/1/20 25,000 Gain on sale of equipment, 6/1/20 5,600 Inventory 85,000 Notes…
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