Ota L'Abbe, a supervisor at an investment research firm, has asked one of the junior analysts, Andreas Hally, to draft a research report dealing with various accounting issues. Excerpts from the request are as follows: • “There's an exciting company that we're starting to follow these days. It's called Snowboards and Skateboards, Inc. They are a multinational company with operations and a head office based in the resort town of Whistler in western Canada. However, they also have a significant subsidiary located in the United States." • "Look at the subsidiary and deal with some foreign currency issues including the specific differences between the temporal and all-current methods of translation, as well as the effect on financial ratios." • "The attached file contains the September 30, 2008, financial statements of the U.S. subsidiary. Translate the financial statements into Canadian dollars in a manner consistent with U.S. GAAP." The following are statements from the research report subsequently written by Hally: Statement 1: Subsidiaries whose operations are well integrated with the parent will use the all- current method of translation. Statement 2: Self-contained, independent subsidiaries whose operating, investing, and financing activities are primarily located in the local market will use the temporal method of translation. Other information to be considered • Exchange rates (CAD/USD) • Beginning inventory for fiscal 2008 had been purchased evenly throughout fiscal 2007. The company uses the FIFO inventory value method. • Dividends of USD 25,000 were paid to the shareholders on June 30, 2008. • All of the remaining inventory at the end of fiscal 2008 was purchased evenly throughout fiscal 2008. • All of the PP&E was purchased, and all of the common equity was issued at the inception of the company on October 1, 2004. No new PP&E has been acquired, and no additional common stock has been issued since then. However, they plan to purchase new PP&E starting in fiscal 2009. • The beginning retained earnings balance for fiscal 2008 was CAD 1,550,000. • The accounts payable on the fiscal 2008 balance sheet were all incurred on June 30, 2008. • The U.S. subsidiary's operations are highly integrated with the main operations in Canada. • The remeasured inventory for 2008 using the temporal method is CAD 810,000. • All monetary asset and liability balances are the same as they were at the end of the 2007 fiscal year, except that long-term debt was USD 467,700. • Costs of goods sold under the temporal method in 2008 is CAD 1,667,250. Are Hally's statements regarding foreign currency translation correct?