On January 1 2013 Zoe Ltd purchased all of the #81

On January 1, 2013, Zoe Ltd. purchased all of the outstanding common shares of Noah Inc., a
company based in the United States. This is the first time that Zoe Ltd. has acquired a company
that is located outside of Canada and that deals primarily in a currency other than the Canadian
dollar.It is now December 31, 2013 and you have been provided with Noah Inc.'s statements of
financial position as at December 31, 2013 and 2012 and their income statement for the year
ended December 31, 2013 as follows.NOAH INC.Income StatementFor the Year Ended
December 31, 2013In US $Sales ..................... $9,000,000Cost of Sales ..................
6,200,000Gross Profit .................. 2,800,000Other expenses .................. $2,100,000Income
before taxes ............... 700,000Income taxes .................. $ 300,000Net Income .................. $
400,000Other Information:Foreign Exchange RatesJanuary 1, 2013: ................ U.S. $1 = C
$0.98December 31, 2013: ................ U.S. $1 = C $1.042013 Average Rate: ................ U.S. $1
= C $1.011. Zoe Ltd.'s functional and presentation currency is the Canadian dollar and Noah
Ltd.'s is the U.S. dollar. Explain the impacts of this.2. Calculate the 2013 foreign exchange gain
or loss that will arise due to translation and explain where it will be recorded.Required Translate
Noah Ltd.'s 2013 financial statements into Canadian dollars.View Solution:
On January 1 2013 Zoe Ltd purchased all of the

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