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):
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
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)
Calculate the net asset balance:
a. Calculate the translation adjustment determined solely for 2017:
b. Calculate the remeasurement gain or ...
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