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)
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
cash 16,750
Inventory 11,500
Lang 4,150
Building 41,500
Note Payable 20,300
Common Stock 21,900
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
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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