Question

Ch 08 P-35 A Saved 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$). As of December 31, 2017, the subsidiary is preparing financial statements in anticipation of consolidation with the U.S. parent corporation. Both ledgers for the subsidiary are as follows: 40 points Main Operation-Canada Debit C$ Credit 21,695 33,000 eBook C$ 173,000 32,000 56,000 Print 209,000 7,500 25,000 5,600 References Accounts payable Accumulated depreciation Buildings and equipment Cash Common stock Cost of goods sold Depreciation expense Dividends, 4/1/17 Gain on sale of equipment, 6/1/17 Inventory Notes payable-due in 2020 Receivables Retained earnings, 1/1/17 Salary expense Sales Utility expense Branch operation Totals 85,000 75,000 74,000 141,590 29,000 318,000 9,600 6,785 C$ 650,885 C$ 650,885 Credit Ps 53,100 20,100 Branch Operation–Mexico Debit Accounts payable Accumulated depreciation Building and equipment Ps 46,000 Cash 62,000 Depreciation expense 2,600 Inventory beginning-income statement) 29,000 Inventory (ending-income statement) Inventory (ending-balance sheet) 31,000 Purchases 63,000 Receivables 27,000 Salary expense 9,600 Sales Main office Totals Ps 270,200 31,000 130,000 36,000 270, 200 Ps

Answer 1

a. Remeasure the Mexican operation’s figures into Canadian dollars. (Hint: Back into the beginning net monetary asset or liability position.)
	Pesos	Debit	Credit
Accounts payable	53100 x .29 C		15,399
Accumulated depreciation	20,100 c .19 H		3,819
Building and Equipment	46,000 x .19 H	8,740
Cash	62,000  x .29 C	17,980
Depreciation expense	2,600   x .19H	494
Inventory - (Beginning-Income statement)	29,000 x .24 A (’16)	6960
Inventory- (Ending-income statement)	31,000 x .28 A (’17)		8,680
Inventory- (Ending-balances sheet)	31,000 x .28 A (’17)	8,680
Purchases	63,000 x .28 A (’17)	17,640
Receivables	27,000 x .29 C	7,830
Salary expense	9,600 x .28A	2,688
Sales	130,000 x .28A		36,400
Main office	36,000 given		6,785
Remeasurement loss	Schedule One		-71
Total		71,012	71,012
Schedule One – Remeasurement Loss	Pesos		Canadian Dollars
Net monetary liabilities, 1/1/17*	-21,500	X .26	-5,590
Increases in net monetary assets
Sales	130,000	X .28	36,400
Decreases in net monetary assets
Purchases	-63,000	X .28	-17,640
Salary Expense	-9,600	X .28	-2,688
Net monetary assets, 12/31/17(62000+27000-53100)	35,900		10,482
Net monetary assets, 12/31/17 at
Current exchange rate	35,900	X .29	10,411
Remeasurement loss			71
Net monetary liabilities, 1/1/17, can be determined by first determining the net monetary assets at 12/31/13 and then backing out the changes in monetary assets and liabilities during 2013-sales, purchases and salary expense.
Net monetary assets, 12/31/17: Cash + Receivables - Accounts Payable