Ganado Europe $($B$).$ Using facts in the chapter for Ganado Europe, assume that the exchange rate on January $2,2016,$ in Exhibit $11\mathrm{.}6$ dropped in value from $$\frac{1\mathrm{.}1400}{}$ to $$\frac{0\mathrm{.}9400}{}.$ Recalculate Ganado Europe's translated balance sheet for January $2,2016,$ with the new exchange rate using the temporal rate method as shown in the popup window, $.$

a$.$ What is the amount of translation gain or loss?

b$.$ Where should it appear in the financial statements?

c$.$ Why does the translation loss or gain under the temporal method differ from the loss or gain under the current rate method?

a$.$ What is the amount of translation gain or loss? Enter a positive number for a gain and negative for a loss.

$ $($Round to the nearest dollar.$)$

Richland Crane $($A$).$ Richland Crane $($U$.$S$.)$ exports heavy crane equipment to several Chinese dock facilities. Sales are currently $14,000$ units per year at the yuan equivalent of USD$26,000$ each. The Chinese yuan $($CNY$)$ has been trading at CNY$7\mathrm{.}60=$ USD$1\mathrm{.}00,$ but a Hong Kong advisory service predicts the yuan will drop in value next week to CNY$8\mathrm{.}50=$ USD$1\mathrm{.}00,$ after which it will remain unchanged for at least a decade. Accepting this forecast as given, Richland Crane faces a pricing decision in the face of the impending devaluation. It may either $(1)$ maintain the same yuan price and in effect sell for fewer dollars, in which case Chinese volume will not change; or $(2)$ maintain the same dollar price, raise the yuan price in China to offset the devaluation, and experience a $10\%$ drop in unit volume. Direct costs are $75\%$ of the U$.$S$.$ sales price.

a$.$ What would be the short$-$run $($one$-$year$)$ impact of each pricing strategy?

b$.$ Which do you recommend?

a$.$ If Richland Crane maintains the same yuan price and same unit volume, what will be the firm's gross profits?

USD $($Round to the nearest dollar.$)$