Question

Rolfe Company (a US-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 Inventory Land Building Accumulated depreciation Notes payable Common stock Retained earnings NGN 20,040 20,040 10,020 NGN 15,780 10,200 4.020 40,200 (29.100 NGN 52.100 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 May 1 June 1 Aug. 1 Sept.1 Oct. 1 Nov. 1 Dec. 1 Dec. 31 Paid 3,220,000 NN on the note payable. Sold entire Inventory for 16,200,000 NON on account. Sold land for 5,020,000 NGN cash. Collected all accounts receivable. Signed long-term note to receive 3,020,000 NGN cash Bought inventory for 20,020,000 NGN Cash Bought land for 3.020,000 NGN on account. Declared and paid 3,020,000 NGN cash dividend to parent. Recorded depreciation for the entire year of 2,010,000 NON The US dollar ($) exchange rates for 1 NGN are as follows:

Answer 1

Answer:
b.)

Net monetary liability position 1/1	$(4260000)	x	$0.0066	=	$(28116)
Increase in monetary assets
Sold inventory 5/1	$16200000	x	$0.0070		$113400
Sold land 6/1	$6020000	x	$0.0072		$43344
Decrease in monetary assets		x
Bought inventory 10/1	$(20020000)	x	$0.0080		$(160160)
Bought land 11/1	$(3020000)	x	$0.0082		$(24764)
Paid a dividend 12/1	$(3020000)	x	$0.0084		$(25368)
Net monetary liability position 12/31	$(8100000)				$(81664)
Net monetary liability position 12/31 at current exchange rate	$(8100000)	x	$0.0088		$(71280)
Remeasurement gain					$10384