On January 1,2013, the U.K. subsidiary of U.S. International Corporation had the following condensed balance sheet, in pounds sterling (in millions):

The exchange rate on January 1, 2013, was $2/£. Inventory and plant assets at January 1 were acquired when the exchange rate was $1.80/£. Plant assets costing £200 million were purchased when the exchange rate was $2.15/£. No depreciation was taken on these assets in 2013, and no transactions between the parent and the subsidiary occurred during 2013. At the end of 2013, the subsidiary reported the following trial balance:
(in millions)Dr (Cr)
Cash and receivables£2,660
Inventory (LIFO)2,500
Plant assets1,800
Accumulated depreciation(560)
Accounts payable(2,200)
Long-term debt(1,100)
Equity, January 1(2,100)
Sales(4,000)
Cost of goods sold2,000
Depreciation expense160
Other operating expenses840
Total£ 0
The exchange rate when the new LIFO layer arose was $2.05/£ and the subsidiary purchased merchandise sold at an average exchange rate of $2.12/£. Sales and other operating expenses occurred evenly over the year. At year-end, the exchange rate was $2.20/£; the average for the year was $2.10/£.
Required
a. Prepare the remeasured December 31, 2013, trial balance of the U.K. subsidiary, assuming the dollar is the functional currency of the subsidiary. Assume the remeasured balance of equity on January 1, 2013, was $3,520 million. Prepare a schedule to calculate the remeasurement gain or loss.
b. Repeat part a, assuming the pound is the functional currency of the subsidiary. Assume the translated balance of equity on January 1,2013, is $4,200 million. Prepare a schedule to calculate the translation gain or loss

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Assets Cash and receivableS....£2,000 2.200 1,600 (400) Inventory (LIFO) Plant assets Accumulated depreciation Liabilities and equity Accounts payable...aca£2,100 Long-term debt. … … … Equity2,100 1.200 Total assets..£5400 Ttal liabilities and equity5,400 Total liabilities and equity...