On January 1, 2014, Tiller Inc. of Toronto purchased 75% of the outstanding shares of Robinson Limited of London, England. Robinson Limited's statements of financial position, statements of comprehensive income and changes in equity - retained earnings section for the year ended December 31, 2014 are below.
ROBINSON LIMITED
Statement of Financial Position
As at December 31, 2014
(in thousands of £'s)

\begin{array}{|l|r|r|}\hline\text { Assets } & 2014 & 2013 \\\hline \text { Cash } & 50 & 20 \\\hline \text { Accounts Receivable } & 575 & 280\\\hline \text { Inventories } & 825 & 650 \\\hline \text { Equipment, net } & 2,670 & 2,937 \\\hline \text { Total assets } & 4,120 & 3,887 \\\hline\\\hline \text { Liabilities } & & \\\hline \text { Accounts payable } & 465 & 395 \\\hline \text { Bonds payable } & 1,290 & 1,290 \\\hline \text { Common shares } & 1,200 & 1,200 \\\hline \text { Retained Earnings } & 1,165 & 1,002 \\\hline \text { Total liabilities and } & \\\text { shareholders' equity } & 4.120&3,887\\\hline\end{array}

ROBINSON LIMITED
Statement of Comprehensive Income
For the year ended December 31, 2014
(in thousands of £'s)

\begin{array}{|l|r|} \hline& £\\\hline \text { Sales } & 2,170 \\\hline\\\hline \text { Cost of goods sold } & 1,203 \\\hline \text { Depreciation expense } & 267 \\\hline \text { Interest expense } & 80 \\\hline \text { Other expenses } & \underline{407} \\\hline & \underline{1,957} \\\hline \text { Comprehensive income } & \underline{213} \\\hline\end{array}

ROBINSON LIMITED
Statement of Changes in Equity-Partial-Retained earnings section
For the year ended December 31, 2014
(in thousands of £)

\begin{array}{|l|r|} \hline& £ \\\hline \text { Retained earnings - January 1,2014 } & 1,002 \\\hline \text { Comprehensive income for the year } & 213 \\\hline \text { Dividends paid } & (50) \\\hline \text { Retained earnings - December 31,2014 } & 1,165 \\\hline\end{array}

Additional information:
1. Robinson was incorporated on January 1, 2010 when it acquired all its equipment for £4,005,000 and issued its 10 year bonds payable.
2. Robinson purchases and sales occurred evenly over the year. Inventories on hand at December 31, 2013 and December 2014 were purchased evenly over the last quarter of 2013 and 2014, respectively. Inventories as at January 1, 2014 were £650,000.
3. Dividends were paid on March 31, 2014.
4. Foreign exchanges rates are as follows:

\begin{array}{ll}\text { January 1, } 2010 & £ 1=\mathrm{C} \$ 1.95 \\\text { Average for Oct to Dec, } 2013 & £ 1=\mathrm{C} \$ 1.64 \\\text { Average for 2013 } & £ 1=\mathrm{C} \$ 1.73 \\\text { December 31, 2013/January } 1,2014 & £ 1=\mathrm{C} \$ 1.67\\\text { March 31, 2014 } & £ 1=\mathrm{C} \$ 1.61 \\\text { Average for Oct to Dec, } 2014 & £ 1=\mathrm{C} \$ 1.55 \\\text { Average for 2014 } & £ 1=\mathrm{C} \$ 1.57 \\\text { December 31, 2014 } & £ 1=\mathrm{C} \$ 1.52\end{array}

Required:
A)Translate Robinson's statement of comprehensive income for the year ended December 31, 2014 into Canadian dollars assuming its functional currency is Canadian dollars.
B)Calculate the translation gain or loss arising in 2014.

Whether the Foreign Operation's Activities Are Relatively Autonomous of Those

Multiple Choice

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