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	16,580		Notes payable	NGN	20,260
Inventory		11,300		Common stock		21,600
Land		4,130		Retained earnings		10,800
Building		41,300
Accumulated depreciation		(20,650	)
	NGN	52,660			NGN	52,660

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 8,130,000 NGN on the note payable.
May 1	Sold entire inventory for 17,300,000 NGN on account.
June 1	Sold land for 6,130,000 NGN cash.
Aug. 1	Collected all accounts receivable.
Sept.1	Signed long-term note to receive 8,130,000 NGN cash.
Oct. 1	Bought inventory for 20,130,000 NGN cash.
Nov. 1	Bought land for 3,130,000 NGN on account.
Dec. 1	Declared and paid 3,130,000 NGN cash dividend to parent.
Dec. 31	Recorded depreciation for the entire year of 2,065,000 NGN.

The U.S dollar ($) exchange rates for 1 NGN are as follows:

2008	NGN 1	=	$	0.0061
2010	1	=		0.0055
August 1, 2016	1	=		0.0075
December 31, 2016	1	=		0.0077
February 1, 2017	1	=		0.0079
May 1, 2017	1	=		0.0081
June 1, 2017	1	=		0.0083
August 1, 2017	1	=		0.0087
September 1, 2017	1	=		0.0089
October 1, 2017	1	=		0.0091
November 1, 2017	1	=		0.0093
December 1, 2017	1	=		0.0095
December 31, 2017	1	=		0.0110
Average for 2017	1	=		0.0100

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

2. Assuming the U.S.$ is the subsidiary's functional currency, what is the remeasurement gain or loss determined solely for 2017?

Answer 1