Sendelbach Corporation is a U.S.-based organization with operations throughout the world. One of its subsidiaries is headquartered in Toronto, Canada. Although this wholly-owned subsidiary 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 (CS). As of December 31, 2024, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows:

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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, Canada. Although this wholly-owned subsidiary 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$). As of December 31, 2024, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S.
parent corporation. Both ledgers for the subsidiary are as follows:
Accounts payable
Accumulated depreciation
Buildings and equipment
Cash
Common stock
Cost of goods sold
Depreciation expense
Dividends, 4/1/24
Gain on sale of equipment, 6/1/24
Inventory
Notes payable-due in 2027
Receivables
Retained earnings, 1/1/24
Salary expense
Sales
Utility expense
Branch operation
Totals
Accounts payable
Accumulated depreciation
Building and equipment
Cash
Salary expense
Sales
Main office
Depreciation expense
Inventory (beginning-income statement)
Inventory (ending-income statement)
Inventory (ending-balance sheet)
Purchases
Receivables
Show Transcribed Text
Main Operation-Canada
Branch Operation-Mexico
Weighted average rate for 2023
January 1, 2024
Weighted average rate for 2024
December 31, 2024
Debit
January 1, 2024
April 1, 2024
June 1, 2024
CS 167,000
26,000
203,000
8,000
28,000
98,000
68,000
26,000
9,000
7,530
C$ 640,530
Show Transcribed Text
Debit
Weighted average rate for 2024
December 31, 2024
Ps 40,000
59,000
2,000
23,000
28,000
68,000
21,000
9,000
Credit
C$ 35,000
27,000
C$ 0.30
0.32
0.34
0.35
50,000
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.
5,000
76,000
n
• The building and equipment used in the Mexican operation were acquired in 2014 when the currency exchange rate was C$0.25 =
Ps 1.
US$ 0.70
0.69
135,530
• Purchases of inventory were made evenly throughout the fiscal year.
Beginning inventory was acquired evenly throughout 2023; ending inventory was acquired evenly throughout 2024.
• The Main Office account on the Mexican records should be considered an equity account. This balance was remeasured into
C$7,530 on December 31, 2024.
• Currency exchange rates for 1 Ps applicable to the Mexican operation follow:
0.68
0.67
0.65
312,000
C$ 640,530
Credit
Ps 49,000
19,000
28,000
• The December 31, 2023, consolidated balance sheet reported a cumulative translation adjustment with a $36,950 credit (positive)
balance.
124,000
30,000
• The subsidiary's common stock was issued in 2011 when the exchange rate was $0.45 = C$1.
• The subsidiary's December 31, 2023, retained earnings balance was C$135,530, an amount that has been translated into
US$70,421.
• The applicable currency exchange rates for 1 C$ for translation purposes are as follows:
Required:
1. Translate the Canadian dollar functional currency financial statements into U.S. dollars so that Sendelbach can prepare consolidated
financial statements.
Transcribed Image Text:Sendelbach Corporation is a U.S.-based organization with operations throughout the world. One of its subsidiaries is headquartered in Toronto, Canada. Although this wholly-owned subsidiary 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$). As of December 31, 2024, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows: Accounts payable Accumulated depreciation Buildings and equipment Cash Common stock Cost of goods sold Depreciation expense Dividends, 4/1/24 Gain on sale of equipment, 6/1/24 Inventory Notes payable-due in 2027 Receivables Retained earnings, 1/1/24 Salary expense Sales Utility expense Branch operation Totals Accounts payable Accumulated depreciation Building and equipment Cash Salary expense Sales Main office Depreciation expense Inventory (beginning-income statement) Inventory (ending-income statement) Inventory (ending-balance sheet) Purchases Receivables Show Transcribed Text Main Operation-Canada Branch Operation-Mexico Weighted average rate for 2023 January 1, 2024 Weighted average rate for 2024 December 31, 2024 Debit January 1, 2024 April 1, 2024 June 1, 2024 CS 167,000 26,000 203,000 8,000 28,000 98,000 68,000 26,000 9,000 7,530 C$ 640,530 Show Transcribed Text Debit Weighted average rate for 2024 December 31, 2024 Ps 40,000 59,000 2,000 23,000 28,000 68,000 21,000 9,000 Credit C$ 35,000 27,000 C$ 0.30 0.32 0.34 0.35 50,000 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. 5,000 76,000 n • The building and equipment used in the Mexican operation were acquired in 2014 when the currency exchange rate was C$0.25 = Ps 1. US$ 0.70 0.69 135,530 • Purchases of inventory were made evenly throughout the fiscal year. Beginning inventory was acquired evenly throughout 2023; ending inventory was acquired evenly throughout 2024. • The Main Office account on the Mexican records should be considered an equity account. This balance was remeasured into C$7,530 on December 31, 2024. • Currency exchange rates for 1 Ps applicable to the Mexican operation follow: 0.68 0.67 0.65 312,000 C$ 640,530 Credit Ps 49,000 19,000 28,000 • The December 31, 2023, consolidated balance sheet reported a cumulative translation adjustment with a $36,950 credit (positive) balance. 124,000 30,000 • The subsidiary's common stock was issued in 2011 when the exchange rate was $0.45 = C$1. • The subsidiary's December 31, 2023, retained earnings balance was C$135,530, an amount that has been translated into US$70,421. • The applicable currency exchange rates for 1 C$ for translation purposes are as follows: Required: 1. Translate the Canadian dollar functional currency financial statements into U.S. dollars so that Sendelbach can prepare consolidated financial statements.
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