2Assume Beta's functional currency is the US dollar. Calculate Beta's remeasurement G/L, and

tell me where the total gain or loss is included on the financial statements.

3Provide a brief definition of the term "functional currency".

9 B. Foreign Currency Financial Statements Problem. Total of 22 points. Alpha Co owns all of Beta Co, a English subsidiary that records transactions in pounds sterling (k), Beta Co's 20x3 beginning balance sheet, ending balance sheet, and income statement are presented below. Balance Sheet: 1/1/20x3 12/31/20x3 Cash Income Statement 20x3 100 160 Inventories Sales 600 100 PPE, net 100 COGS 300 500 650 Other Exp 150 Total Assets: 700 910 Dep Exp. 50 Accts Payable 50 50 Net Income 100 Long term Debt 100 250 Capital Stock, par 10 10 APIC 390 390 Retained Earnings 150 210 Liabilities and SE: 700 910 Other facts include: Beta Co purchased 300 in inventory evenly throughout the year, spent 200 on equipment on December 31st, 20x3, and paid a dividend of 40 10 Alpha Co on November 1, 20x3. Relevant exchange rates are: $1.10/ on 1/1/20x3, $1.30 / on 12/31/20x3, $1.207 average during the year, $1.25/ on November 1, 20x3. 1. (8 pts) Assume Beta's functional currency is the pound sterling. Calculate Beta's translation gain or loss, and tell me where the total gain or loss is included on the financial statements