Angkor Wattages, Ltd., is the Cambodian affiliate of a U.S. electronic instrument manufacturer. Angkor Wattages manufactures the instruments primarily for the alternative energy industry globally, though with recent commodity price increases of all kinds -- including copper -- its business has begun to grow rapidly. Sales are primarily to multinational companies based in the United States and Europe. Ankor Wattages' balance sheet in thousands of Cambodian riel (R) as of March 1st is as follows.

Using the data presented, assume that the Cambodian riel dropped in value from R3000/$ to R4500/$ between March 1st and April 1st. Assuming no change in balance sheet accounts between this month, calculate the gain or loss from translation by both the current rate method and the temporal method. Explain the translation gain or loss in terms of changes in the value of exposed accounts

Current Method:

Temporal Method:

Balance Sheet (Millions) Assets Cash Before Devaluation Translated Exchange Rate Accounts (Riel/USS) US dollars 3,000 $ 3,000 $ 12.0 3,000 16.0 20.0 56.0 8.0 Cambodian riel Statement 24000 36000 48000 60000 168000 Accounts receivable Inventory Net plant & equipment Total 3,000 Liabilities & Net Worth Accounts payable Bank loans Common stock Retained earnings CTA account (loss) Total 18000 60000 18000 72000 3,000 3,000 2,000 3,429 6.0 20.0 9.0 21.0 168000 56.0 Balance Sheet (Millions) Assets Cash Before Devaluation Translated Exchange Rate Accounts (Riel/US$) US dollars 3,000 $ 8.0 3,000 $ 12.0 3,000 16.0 2.000 30.0 66.0 Cambodian riel Statement 24000 36000 48000 60000 168000 Accounts receivable Inventory Net plant & equipment Total Liabilities & Net Worth Accounts payable Bank loans Common stock Retained earnings CTA account (loss) Total 18000 60000 18000 72000 3,000 3,000 2,000 2,323 6.0 20.0 9.0 31.0 168000 66.0 Balance Sheet (Millions) Assets Cash Before Devaluation Translated Exchange Rate Accounts (Riel/USS) US dollars 3,000 $ 3,000 $ 12.0 3,000 16.0 20.0 56.0 8.0 Cambodian riel Statement 24000 36000 48000 60000 168000 Accounts receivable Inventory Net plant & equipment Total 3,000 Liabilities & Net Worth Accounts payable Bank loans Common stock Retained earnings CTA account (loss) Total 18000 60000 18000 72000 3,000 3,000 2,000 3,429 6.0 20.0 9.0 21.0 168000 56.0 Balance Sheet (Millions) Assets Cash Before Devaluation Translated Exchange Rate Accounts (Riel/US$) US dollars 3,000 $ 8.0 3,000 $ 12.0 3,000 16.0 2.000 30.0 66.0 Cambodian riel Statement 24000 36000 48000 60000 168000 Accounts receivable Inventory Net plant & equipment Total Liabilities & Net Worth Accounts payable Bank loans Common stock Retained earnings CTA account (loss) Total 18000 60000 18000 72000 3,000 3,000 2,000 2,323 6.0 20.0 9.0 31.0 168000 66.0