6) (8 points) Suppose Halon France, a French subsidiary of a US company, Halon, Inc. has the following balance sheet on September 30:

Assets (euro thousands) Liabilities (euro thousands)

Cash, marketable securities 7000 Accounts payable 14,000

Accounts receivable 18,000 Short-term debt 8,000

Inventory 31,000 Long-term debt 45,000

Net fixed assets 63,000 Equity 52,000

Assume the $/euro rate on September 30 is $1.15/euro. Suppose at the end of the year (Dec. 31) the exchange rate is $1.20/euro. Calculate the translation gains or losses for Halon France as a result of the exchange rate change between Sept 30 and Dec. 31 using both (a) the current rate method and the (b) temporal method. Assume the euro-denominated items in the balance sheet remain constant. Also, for this problem assume inventory is carried on the books at historical value.