Question

Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands (000's)): Cash NGN 16,830 Notes payable NGN 20,460 Inventory 12,300 Common stock 22,700 Land 4,230 Retained earnings 11,350 Building 42,300 Accumulated depreciation (21,150 ) NGN 54,510 NGN 54,510 The subsidiary acquired the inventory on August 1, 2016, and the land and building in 2010. It issued the common stock in 2008. During 2017, the following transactions took place: 2017 Feb. 1 Paid 8,230,000 NGN on the note payable. May 1 Sold entire inventory for 18,300,000 NGN on account. June 1 Sold land for 6,230,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept.1 Signed long-term note to receive 8,230,000 NGN cash. Oct. 1 Bought inventory for 20,230,000 NGN cash. Nov. 1 Bought land for 3,230,000 NGN on account. Dec. 1 Declared and paid 3,230,000 NGN cash dividend to parent. Dec. 31 Recorded depreciation for the entire year of 2,115,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: 2008 NGN 1 = $ 0.0071 2010 1 = 0.0065 August 1, 2016 1 = 0.0085 December 31, 2016 1 = 0.0087 February 1, 2017 1 = 0.0089 May 1, 2017 1 = 0.0091 June 1, 2017 1 = 0.0093 August 1, 2017 1 = 0.0097 September 1, 2017 1 = 0.0099 October 1, 2017 1 = 0.0101 November 1, 2017 1 = 0.0103 December 1, 2017 1 = 0.0105 December 31, 2017 1 = 0.0130 Average for 2017 1 = 0.0120 Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2017? Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2017? (Input all amounts as positive. Enter amounts in whole dollars.) Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands (000's)): Cash NGN 16,830 Notes payable NGN 20,460 Inventory 12,300 Common stock 22,700 Land 4,230 Retained earnings 11,350 Building 42,300 Accumulated depreciation (21,150 ) NGN 54,510 NGN 54,510 The subsidiary acquired the inventory on August 1, 2016, and the land and building in 2010. It issued the common stock in 2008. During 2017, the following transactions took place: 2017 Feb. 1 Paid 8,230,000 NGN on the note payable. May 1 Sold entire inventory for 18,300,000 NGN on account. June 1 Sold land for 6,230,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept.1 Signed long-term note to receive 8,230,000 NGN cash. Oct. 1 Bought inventory for 20,230,000 NGN cash. Nov. 1 Bought land for 3,230,000 NGN on account. Dec. 1 Declared and paid 3,230,000 NGN cash dividend to parent. Dec. 31 Recorded depreciation for the entire year of 2,115,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: 2008 NGN 1 = $ 0.0071 2010 1 = 0.0065 August 1, 2016 1 = 0.0085 December 31, 2016 1 = 0.0087 February 1, 2017 1 = 0.0089 May 1, 2017 1 = 0.0091 June 1, 2017 1 = 0.0093 August 1, 2017 1 = 0.0097 September 1, 2017 1 = 0.0099 October 1, 2017 1 = 0.0101 November 1, 2017 1 = 0.0103 December 1, 2017 1 = 0.0105 December 31, 2017 1 = 0.0130 Average for 2017 1 = 0.0120 Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2017? Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2017? (Input all amounts as positive. Enter amounts in whole dollars.) Rolfe Company (a U.S.-based company) has a subsidiary in Nigeria where the local currency unit is the naira (NGN). On December 31, 2016, the subsidiary had the following balance sheet (amounts are in thousands (000's)): Cash NGN 16,830 Notes payable NGN 20,460 Inventory 12,300 Common stock 22,700 Land 4,230 Retained earnings 11,350 Building 42,300 Accumulated depreciation (21,150 ) NGN 54,510 NGN 54,510 The subsidiary acquired the inventory on August 1, 2016, and the land and building in 2010. It issued the common stock in 2008. During 2017, the following transactions took place: 2017 Feb. 1 Paid 8,230,000 NGN on the note payable. May 1 Sold entire inventory for 18,300,000 NGN on account. June 1 Sold land for 6,230,000 NGN cash. Aug. 1 Collected all accounts receivable. Sept.1 Signed long-term note to receive 8,230,000 NGN cash. Oct. 1 Bought inventory for 20,230,000 NGN cash. Nov. 1 Bought land for 3,230,000 NGN on account. Dec. 1 Declared and paid 3,230,000 NGN cash dividend to parent. Dec. 31 Recorded depreciation for the entire year of 2,115,000 NGN. The U.S dollar ($) exchange rates for 1 NGN are as follows: 2008 NGN 1 = $ 0.0071 2010 1 = 0.0065 August 1, 2016 1 = 0.0085 December 31, 2016 1 = 0.0087 February 1, 2017 1 = 0.0089 May 1, 2017 1 = 0.0091 June 1, 2017 1 = 0.0093 August 1, 2017 1 = 0.0097 September 1, 2017 1 = 0.0099 October 1, 2017 1 = 0.0101 November 1, 2017 1 = 0.0103 December 1, 2017 1 = 0.0105 December 31, 2017 1 = 0.0130 Average for 2017 1 = 0.0120 Assuming the NGN is the subsidiary's functional currency, what is the translation adjustment determined solely for 2017? Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2017? (Input all amounts as positive. Enter amounts in whole dollars.)

Answer 1

The figures are copied and pasted two to three times.It is really confusing to find out the exact figures.

a)	Net asset balance 1/1	$34,050,000	X	0.0087	=	$296,235
	Increases in net assets (income):
	Sold inventory at a profit, 5/1	$6,000,000	X	0.0091	=	$54,600
	Sold land at a gain, 6/1	$2,000,000	X	0.0093	=	$18,600
	Decreases in net assets:
	Paid a dividend, 12/1	($3,230,000)	X	0.0105	=	($33,915)
	Depreciation recorded	($2,115,000)	X	0.0120	=	($25,380)
	Net asset balance, 12/31	$36,705,000				$310,140
	Net asset balance, 12/31 at current exchange rate	$36,705,000	X	0.013	=	($477,165.00)
	Translation adjustment—positive					($167,025.00)
b)	Net monetary liability position, 1/1	($34,050,000)	X	0.0087	=	($296,235)
	Increases in monetary assets:
	Sold inventory, 5/1	$18,300,000	X	0.0091	=	$166,530
	Sold land, 6/1	$62,30,000	X	0.0093	=	$57939
	Decreases in monetary assets:
	Bought inventory, 10/1	($20,230,000)	X	0.0101	=	($204,323)
	Bought land, 11/1	($3,230,000)	X	0.0103	=	($33,269)
	Paid a dividend, 12/1	($3,230,000)	X	0.0105	=	($33,915)
	Net monetary liability position, 12/31	($36210,000)				($343273)
	Net monetary liability position, 12/31 at current exchange rate	($36210,000)	X	0.013	=	($470730)
	Remeasurement gain					($814003)