A U.S parent owns all of the stock of an Italian subsidiary. The subsidiary?s January 1 and December 31, 2017 trial balances are as follows, in euros:

Sales, purchases, and recurring out of pocket expenses occurred evenly throughout the year. Exchange rates ($/?) are:

Assume the subsidiary?s functional currency is the U.S. dollar. What is the remeasurement gain or loss for 2017?

a) $164,500 loss

b) $ 112,000 loss

c) $164,500 gain

d) $ 112,000 gain

Cash, receivables Inventories, at FIFO cost Plant & equipment, net Liabilities Capital stock Retained earnings, beginning Dividends Sales Revenue Cost of goods sold Depreciation expense Out of pocket expenses January 1, 2017 Dr (Cr) 350,000 600,000 1,700,000 (1,500,000) (450,000) (700,000) 0 December 31, 2017 Dr (Cr) 325,000 750,000 1,550,000 (1,375,000) (450,000) 700,000 100,000 (1,950,000) (1,100,000) 150,000 500,000 0 January 1, 2017 Average for 2017 Rate when dividends declared December 31, 2017 $1.45 1.35 1.32 1.30