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Rolfe company (a US based company) has a subsidiary in Nigeria where the local currency unit is naira (NGN). On december 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands):cash 16,750Inventory 11,500Lang 4,150Building 41,500Accumulate depreciation (20,750)Note Payable 20,300Common Stock 21,900Retained Earnings 10,950The subsidiary adquired the investory on Agust 1, 2016, and the land and building in 2010. It issued the common stock in 2008. During 2017, the following transactions took place:Feb. 1 Paid 8,150,000 NGN on note payableMay 1 Sold entire inventory for 17,500,000 on accountJune 1 Sold land for 6,150,000 cashAug. 1 collected all accounts receivableSept 1 signed long term note to receive 8,150,000 NGN cashOct 1 bought inventory for 20,150,000 NGN cashNov 1 Bought land for 3,150,000 NGN accountDec 1 Declared and paid 3,150,000 NGN cash dividend to parentDec 31 Recorded depreciation for the entire year of 2,075,000 NGN The US dollar ($) exchange rates for 1 NGN are as follows2008  0.00632010  0.0057August 1,2016  0.0077December 31,2016  0.0079February 1,2017  0.0081May 1, 2017  0.0083June 1, 2017  0.0085August 1,2017  0.0089September 1,2027  0.0091October 1, 2017  0.0093November 1,2017  0.0095December 1, 2017  0.0097December 31, 2017  0.0114Average for 2017  0.0104a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2017?b. Assuming the U.S $ in the subsidiary;s functional currency, what is the reamesurement gain or loss determined solely for 2017?(Enter the amounts in whole dollars)

Question

Rolfe company (a US based company) has a subsidiary in Nigeria where the local currency unit is naira (NGN). On december 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands):

cash 16,750

Inventory 11,500

Lang 4,150

Building 41,500

Accumulate depreciation (20,750)

Note Payable 20,300

Common Stock 21,900

Retained Earnings 10,950

The subsidiary adquired the investory on Agust 1, 2016, and the land and building in 2010. It issued the common stock in 2008. During 2017, the following transactions took place:

Feb. 1 Paid 8,150,000 NGN on note payable

May 1 Sold entire inventory for 17,500,000 on account

June 1 Sold land for 6,150,000 cash

Aug. 1 collected all accounts receivable

Sept 1 signed long term note to receive 8,150,000 NGN cash

Oct 1 bought inventory for 20,150,000 NGN cash

Nov 1 Bought land for 3,150,000 NGN account

Dec 1 Declared and paid 3,150,000 NGN cash dividend to parent

Dec 31 Recorded depreciation for the entire year of 2,075,000 NGN

 

The US dollar ($) exchange rates for 1 NGN are as follows

2008  0.0063

2010  0.0057

August 1,2016  0.0077

December 31,2016  0.0079

February 1,2017  0.0081

May 1, 2017  0.0083

June 1, 2017  0.0085

August 1,2017  0.0089

September 1,2027  0.0091

October 1, 2017  0.0093

November 1,2017  0.0095

December 1, 2017  0.0097

December 31, 2017  0.0114

Average for 2017  0.0104

a. Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2017?

b. Assuming the U.S $ in the subsidiary;s functional currency, what is the reamesurement gain or loss determined solely for 2017?

(Enter the amounts in whole dollars)

 

 

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Step 1

Calculate the net asset balance:

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Step 2

a. Calculate the translation adjustment determined solely for 2017:

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Step 3

b. Calculate the remeasurement gain or ...

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