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	16,840		Notes payable	NGN	20,480
Inventory		12,400		Common stock		22,800
Land		4,240		Retained earnings		11,400
Building		42,400
Accumulated depreciation		(21,200	)
	NGN	54,680			NGN	54,680

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 8,240,000 NGN on the note payable.
May 1	Sold entire inventory for 18,400,000 NGN on account.
June 1	Sold land for 6,240,000 NGN cash.
Aug. 1	Collected all accounts receivable.
Sept.1	Signed long-term note to receive 8,240,000 NGN cash.
Oct. 1	Bought inventory for 20,240,000 NGN cash.
Nov. 1	Bought land for 3,240,000 NGN on account.
Dec. 1	Declared and paid 3,240,000 NGN cash dividend to parent.
Dec. 31	Recorded depreciation for the entire year of 2,120,000 NGN.

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

2008	NGN 1	=	$	0.0072
2010	1	=		0.0066
August 1, 2016	1	=		0.0086
December 31, 2016	1	=		0.0088
February 1, 2017	1	=		0.0090
May 1, 2017	1	=		0.0092
June 1, 2017	1	=		0.0094
August 1, 2017	1	=		0.0098
September 1, 2017	1	=		0.0100
October 1, 2017	1	=		0.0102
November 1, 2017	1	=		0.0104
December 1, 2017	1	=		0.0106
December 31, 2017	1	=		0.0132
Average for 2017	1	=		0.0122

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