Aries Inc. holds a 90% interest in Sharatan Ltd., a corporation based in France. Sharatan Ltd. is a foreign operation (selfsustaining subsidiary)....

Aries Inc. holds a 90% interest in Sharatan Ltd., a corporation based in France. Sharatan Ltd. is a foreign operation (self-sustaining subsidiary). Aries Inc.’s interest in Sharatan Ltd. was purchased on December 31, 2011, for €1,485,000 (euros). The carrying amount of Sharatan Inc.’s identifiable net assets was €1,425,000 at the acquisition date. The entire purchase discrepancy was attributed to goodwill and no impairment of goodwill has occurred. Aries Inc. uses the fair value enterprise method (entity theory) to value non-controlling interest (NCI).

SHARATAN LTD. Statement of Financial Position December 31, 2012, with comparative figures for 2011 (EUR)
	2012	2011

Cash and receivables	€1,950,000	€ 800,000
Inventory	975,000	475,000
Property, plant and equipment (net)	1,750,000	2,250,000
Total assets	€4,675,000	€3,525,000

Liabilities	€3,000,000	€2,100,000
Shareholders’ equity
Ordinary shares	1,000,000	1,000,000
Retained earnings	675,000	425,000
Total shareholders’ equity	1,675,000	1,425,000
Total liabilities and shareholders’ equity	€4,675,000	€3,525,000

SHARATAN LTD. Statement of Profit or Loss and Retained Earnings year ended December 31, 2012 (EUR)
Revenue		€5,000,000
Cost of goods sold		2,500,000
Depreciation expense		500,000
Other expenses		1,600,000
Total expenses		4,600,000
Net income		€ 400,000

Additional information

All of Sharatan Ltd.’s property, plant, and equipment was purchased on the date of its incorporation, January 1, 2009.
Sharatan Ltd.’s ending inventory was purchased on September 30, 2012.
Sharatan Ltd. declared and paid dividends of €150,000 on December 31, 2012.
Exchange rates are as follows:
January 1, 2009                €1 = C$1.40
December 31, 2011           €1 = C$1.46
September 30, 2012          €1 = C$1.54
December 31, 2012           €1 = C$1.56
Average for 2012              €1 = C$1.51

Required

Calculate Sharatan Ltd.’s other comprehensive income in Canadian dollars. (2 marks)
Prepare Sharatan Ltd.’s December 31, 2012, statement of financial position in Canadian dollars. (3 marks)
Aries Inc.’s separate entity financial statements do not contain any other comprehensive income (OCI). Calculate Aries Inc.’s consolidated other comprehensive income and determine how much is attributable to Aries Inc.’s equity holders. (2 marks)