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On January 1, 2011, Larmer Corp. (a Canadian company) purchased 80% of Martin Inc, an American company, for $50,000 U.S. Martin's book values approximated its fair values on that date except for plant and equipment, which had a fair market value of $30,000 U.S. with a remaining life expectancy of 5 years. A goodwill impairment loss of $1,000 U.S. occurred during 2011. Martin's January 1, 2011 Balance Sheet is shown below (in U.S. dollars):

Current Monetary Assets	$50,000
Inventory	$40,000
Plant and Equipment	$25,000
Total Assets	$115,000
Current Liabilities	$45,000
Bonds Payable (maturity: January 1, 2016)	$20,000
Common Shares	$30,000
Retained Earnings	$20,000
Total Liabilities and Equity	$115,000

The following exchange rates were in effect during 2011:

January 1, 2011:	US $1 = CDN $1.3250
Average for 2011:	US $1 = CDN $1.3350
Date when Inventory Purchased:	US $1 = CDN $1.34
December 31, 2011:	US $1 = CDN $1.35

Dividends declared and paid December 31, 2011 The financial statements of Larmer (in Canadian dollars) and Martin (in U.S. dollars) are shown below:

Balance Sheets	Larmer	Martin
Current Monetary Assets	$42,050	$65,000
Inventory	$60,000	$50,000
Plant and Equipment	$23,500	$20,000
Investment in Martin (at Cost)	$66,250	-
Assets	$191,800	$135,000
Current Liabilities	$50,000	$48,000
Bonds Payable (maturity: January 1, 2016)	$35,000	$20,000
Common Shares	$60,000	$30,000
Retained Earnings	$30,000	$20,000
Net Income	$28,800	$27,000
Dividends	-$12,000	-$10,000
Liabilities and Equity	$191,800	$135,000
Income Statements	Larmer	Martin
Sales	$80,000	$50,000
Dividend Income	$10,800	-
Cost of Sales	-$40,000	-$15,000
Depreciation	-$10,000	-$5,000
Other expenses	-$12,000	-$3,000
Net Income	$28,800	$27,000

1) Compute Martin's exchange gain or loss for 2011 if Martin is considered to be an integrated foreign subsidiary.

2) Translate Martin's 2011 Income Statement into Canadian dollars if Martin is considered to be an integrated foreign subsidiary.

3) Translate Martin's December 31, 2011 Balance Sheet into Canadian dollars if Martin is considered to be an integrated foreign subsidiary.

4) Prepare Larmer's December 31, 2011 Consolidated Balance Sheet if Martin is considered to be an integrated foreign subsidiary.

NOTE: From Modern Advanced Accounting 7th Edition

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