Foreign Sub is a wholly owned subsidiary of U.S. Domestic Corporation. U.S. Domestic Corporation acquired the subsidiary several years ago. The financial statements for Foreign Sub for 2014 in its own currency appear in Exhibit 8.32.

The exchange rates between the U.S. dollar and the foreign currency of the subsidiary
December 31, 2013...............................$10.0:1FC
Average, 2014......................................$ 8.0:1FC
December 31, 2014.................................$ 6.0:1FC
On January 1, 2014, Foreign Sub issued FC100 of long-term debt and FC100 of common stock in the acquisition of land costing FC200. Operating activities occurred evenly over the year.
REQUIRED
a. Assume that the currency of Foreign Sub is the functional currency. Compute the change in the cumulative translation adjustment for 2014. Indicate whether the change increases or decreases shareholders' equity.
b. Assume that the U.S. dollar is the functional currency. Compute the amount of the translation gain or loss for 2014. Indicate whether the amount is a gain or loss.

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Exhibit 8.32 Foreign Sub Financial Statement Data (Problem 8.24) December 31 2013 2014 Cash Accounts receivable nventories Land FC 100 FC 150 350 400 300 350 500 Total Assets FC1,250 FC 1,600 Exhibit 8.32 (Continued) Accounts payable Long-term debt Common stock Retained earmings FC 150 FC 250 300 600 450 50 FC 1,600 200 500 400 Total Liabilities and Equities For 2010 Sales Cost of goods sold Selling and administrative expenses Income taxes Net Income Dividend declared and paid on December 31 Increase in Retained Earni FC 4,000 (3,200) (400) (160) FC 240 (190) FC 50