Ganado Europe (B). Using facts in the chapter for Ganado Europe, assume that the exchange rate on January 2, 2016, in Exhibit 11.6 dropped in value from $1.2100/ to $0.8600/. 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) b. Where should it appear in the financial statements? (Select the best choice below.) OA. The translation gain (loss) for the year is added to the balance in the Total Assets account OB. The translation gain (loss) for the year is added to the balance in the Total Liabilities and Net Worth account OC. The translation gain (loss) for the year is added to the balance in the Cumulative Translation Adjustment (CTA) account OD. The translation gain (loss) for the year is added to the balance in the Retained Earnings account c. Why does the translation loss or gain under the temporal method differ from the loss or gain under the current rate method? (Select the best choice below.) O A. The exposed assets under the current rate method are larger than under the temporal method by the amount of short-term bank debt and long-term debt. OB. The exposed assets under the current rate method are larger than under the temporal method by the amount of cash and accounts receivable OC. The exposed assets under the current rate method are larger than under the temporal method by the amount of accounts payable and common stock OD. The exposed assets under the current rate method are larger than under the temporal method by the amount of inventory and not plant and equipment. Click to select your answer(s). Data Table EXHIBIT 11.6 Ganado Europe's Translation Loss After Depreciation of the Euro: Temporal Method December 31, 2015 January 2, 2016 Exchange Rate Translated Exchange Rate Translated In Euros (C) Assets (US$/euro) Accounts (US$) $860,000 $1,210,000 1,000,000 1.2100 0.8600 Cash 2,666,000 3,100,000 3,751,000 1.2100 0.8600 Accounts receivable 1.2270 2,300,000 2,822,100 2,822,100 1.2270 Inventory 6,296,500 6,296,500 4,900,000 1.2850 1.2850 Net plant and equipment $12,644,600 Total $14,079,600 11,300,000 Liabilities and Net Worth 900,000 Accounts payable 1.2100 $1,089,000 0.8600 $774,000 1,700,000 1.2100 Short-term bank debt 2,057,000 0.8600 1,462,000 2,000,000 1.2100 Long-term debt 0.8600 2,420,000 1,720,000 Common stock 1,800,000 1.2850 2,313,000 1.2850 2,313,000 Retained earnings 4,900,000 1.2506 (a) 6,200,600 1.2506 (b) 6,200,600 Translation gain (loss) (c) Total 11,300,000 $14,079,600 $12,644,600 (a) Dollar retained earnings before depreciation are the cumulative sum of additions to retained earnings of all prior years, translated to exchange rates in each year. (b) Translated into dollars at the same rate as before depreciation of the euro. (c) Under the temporal method, the translation loss would be closed into retained earnings through the income statement rather than left as a separate line item as shown here Click on the icon located on the top right corner of the data table in order to copy its contents into a spreadsheet. Print Done Click to select your answer(s)