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	15,780		Notes payable	NGN	20,040
Inventory		10,200		Common stock		20,040
Land		4,020		Retained earnings		10,020
Building		40,200
Accumulated depreciation		(20,100	)
	NGN	50,100			NGN	50,100

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 8,020,000 NGN on the note payable.
May 1	Sold entire inventory for 16,200,000 NGN on account.
June 1	Sold land for 6,020,000 NGN cash.
Aug. 1	Collected all accounts receivable.
Sept.1	Signed long-term note to receive 8,020,000 NGN cash.
Oct. 1	Bought inventory for 20,020,000 NGN cash.
Nov. 1	Bought land for 3,020,000 NGN on account.
Dec. 1	Declared and paid 3,020,000 NGN cash dividend to parent.
Dec. 31	Recorded depreciation for the entire year of 2,010,000 NGN.

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

2008	NGN 1	=	$	0.0050
2010	1	=		0.0044
August 1, 2016	1	=		0.0064
December 31, 2016	1	=		0.0066
February 1, 2017	1	=		0.0068
May 1, 2017	1	=		0.0070
June 1, 2017	1	=		0.0072
August 1, 2017	1	=		0.0076
September 1, 2017	1	=		0.0078
October 1, 2017	1	=		0.0080
November 1, 2017	1	=		0.0082
December 1, 2017	1	=		0.0084
December 31, 2017	1	=		0.0088
Average for 2017	1	=		0.0078

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