E7.11 Translated and Remeasured Trial BalancesThe inode Company established a wholly-owned on January 1, 2019, when the exchange rate was $0.30/riyal (SAR). Of Thode's initial SAR200.000.000 investment, SAR100,000,000 was used to acquire plant assets (ten- vear life) and SAR50.000.000 was used to acquire inventory. The remaining amount was initially held as cash by the subsidiary. During 2019. the subsidiary reported net income of SAR20.000.000. Inventory purchases of SAR15.000.000 were made evenly during the year. It paid dividends of SAR10.000.000 on Sentember 30, when the exchange rate was $0.255/SAR. No other transactions occurred between the subsidiary and the parent. The subsidiary's condensed income statement appears below: Sales. . . . . Cost of goods sold (1) ......... Depreciation expense (2) ......... Other cash expenses ........ Net income.... SAR85,000,000 (40,000,000) (10,000,000) (15,000,000) SAR20,000,000 (1) Assume a FIFO inventory flow assumption (2) Relates solely to plant assets acquired on January 1, 2019. The average rate during the year was $0.265/SAR. On the balance sheet date, it was $0.25/SAR. Required a. Assuming the functional currency is the riyal, translate the subsidiary's preclosing trial balance at De- cember 31, 2019, and prepare a schedule calculating the subsidiary's translation gain or loss for 2019. b. Assuming the functional currency is the U.S. dollar, remeasure the subsidiary's preclosing trial bal- ance at December 31, 2019, and prepare a schedule calculating the subsidiary's remeasurement gain or loss for 2019