Diego Corporation operates a branch operation in a foreign country. Although this branch operates in euros, the U.S. dollar is its functional currency. Thus, a remeasurement is necessary to produce financial information for external reporting purposes. The branch began the year with 544,000 euros in cash and no other assets or liabilities. However, the branch immediately used 335,000 euros to acquire a warehouse. On May 1, it purchased inventory costing 110,000 euros for cash that it sold on July 1 for 190,000 euros cash. The branch transferred 18,000 euros to the parent on October 1 and recorded depreciation on the warehouse of 27,000 euros for the year. U.S dollar exchange rates for 1 euro follow:

Jan 1	$1.14= 1 euro
May 1	$1.18= 1 euro
July 1	$1.20= 1 euro
October 1	$1.18= 1 euro
December 1	$1.08= 1 euro
Average for the year	$1.16= 1 euro

What is the remeasurement gain or loss to be recognized in the consolidated income statement?

Choices:

$22,540 gain

$27,050 loss

$22,540 loss

$27,050 gain

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