12. Simon company has two foreign subsidiaries. One is located in Italy, the other in Austria. Simon has determined the Euro is functional currency for the Italian subsidiary, while the U.S dollar is the functional currency for the Austrian subsidiary. Both subsidiaries maintain their books and records in their local currency (Euro) What methods will Simon use to convert each of the subsidiary's financial statements into U.S. dollars?

	Italian Subsidiaries Financial Statements	Austrian Subsidiary's Financial Statements
a	Translation	Translation
b	Remeasurement	Remeasurement
c	Translation	Remeasurement
d	Remeasurement	Translation

Use the following information for questions 13 and 14:

On October 1, 2014, Patton Corporation purchased merchandise from a German supplier at a price of Euro 240,000 and issued a 7-month, 8% note denominated in Euro to the supplier. The note was payable on April 2015. The bank exchange rates were shown below:

	10/1/2014	12/31/2014	4/30/2015
Spot Rate	Euro 1= US$1.45	Euro 1= US$1.39	Euro 1= US$1.43

13. How much total foreign currency transaction gain or loss should Patton report on its 2015 income statement?

a. Loss of $14,400

b. Loss of $9,792

c. Loss of $9,856

d. Gain of $14,688

14. The journal entries for Patton on April 30, 2015 would include

a. a credit of $359,216 to Cash

b. a credit of $350,064 to Cash

c. a debit of $8,896 to Interest Expense

d. a debit of $16,016 to Interest Expense