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	15,890		Notes payable	NGN	20,020
Inventory		10,100		Common stock		20,020
Land		4,010		Retained earnings		10,010
Building		40,100
Accumulated depreciation		(20,050	)
	NGN	50,050			NGN	50,050

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:

Feb. 1	Paid 8,010,000 NGN on the note payable.
May 1	Sold entire inventory for 16,100,000 NGN on account.
June 1	Sold land for 6,010,000 NGN cash.
Aug. 1	Collected all accounts receivable.
Sept.1	Signed long-term note to receive 8,010,000 NGN cash.
Oct. 1	Bought inventory for 20,010,000 NGN cash.
Nov. 1	Bought land for 3,010,000 NGN on account.
Dec. 1	Declared and paid 3,010,000 NGN cash dividend to parent.
Dec. 31	Recorded depreciation for the entire year of 2,005,000 NGN

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

2008	NGN 1	=	$	0.0049
2010	1	=		0.0043
August 1, 2016	1	=		0.0063
December 31, 2016	1	=		0.0065
February 1, 2017	1	=		0.0067
May 1, 2017	1	=		0.0069
June 1, 2017	1	=		0.0071
August 1, 2017	1	=		0.0075
September 1, 2017	1	=		0.0077
October 1, 2017	1	=		0.0079
November 1, 2017	1	=		0.0081
December 1, 2017	1	=		0.0083
December 31, 2017	1	=		0.0086
Average for 2017	1	=		0.0076

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?

(Input all amounts as positive. Enter amounts in whole dollars.)

Answer 1