On January 1, 2017, Larmer Corp The Following Exchange Rates Were in Effect During 2017

Essay

On January 1, 2017, Larmer Corp. (a Canadian company) purchased 80% of Martin Inc, an American company, for US$50,000.
Martin's book values approximated its fair values on that date except for plant and equipment, which had a fair value of US$30,000 with a remaining life expectancy of 5 years. A goodwill impairment loss of US$1,000 occurred during 2017. Martin's January 1, 2017 Balance Sheet is shown below (in U.S. dollars): $$\begin{array} { | l | l | } \hline \text { Current Monetary Assets } & \$ 50,000 \\\hline \text { muentory } & \$ 40,000 \\\hline \text { Plant and Equipment } & \$ 25,000 \\\hline \text { Total Assets } & \$ 115,000 \\\hline & \\\hline \text { Current Liabilities } & \$ 45,000 \\\hline \text { Bonds Pay able (maturity: January 1, 2022) } &\$ 20,000\\\hline \text { Common Shares } & 30,000\\\hline \text { Retained Earnings } & \$ 20,000\\\hline \text { Total Labilities and Equity } &\$ 115,000 \\\hline & \\\hline\end{array}$$ The following exchange rates were in effect during 2017:
$$\begin{array} { | l | l | } \hline \text { January } 1,2017 : &U S \$ 1 = C D N \$ 1.3260 \\\hline \text { Average for } 2017 : & US \$ 1 = C D N \$ 1.3360 \\\hline \text { Date when Inventory Purchased: } & U S \$ 1 = \text { CDN } \$ 1.34 \\\hline \text { December } 31,2017 : & US \$ 1 = \text { CDN } \$ 1.35 \\\hline & \\\hline\end{array}$$ Dividends declared and paid December 31, 2017.
The financial statements of Larmer (in Canadian dollars) and Martin (in U.S. dollars) are shown below:
Balance Sheets

-Translate Martin's 2017 Income Statement into Canadian dollars if Martin is considered to be an integrated foreign subsidiary (i.e., the functional currency of the foreign operation is the same as the parent).