In 1995, Ajax Manufacturing's German subsidiary has the following balance sheet:

Cash, marketable securities Accounts receivable Inventory (at market. Fixed Assets Total assets

DM 250,000 1,000,000 2,700,000 5,100,000 ----------------- DM 9,050,000

Current liabilities Long-term debt Equity Total liabilities plus equity

DM 750,000 3,400,000 4,900,000 --------------- DM 9,050,000

Suppose the DM appreciates from $0.70 to $0.76 during the period.

Under the monetary/non-monetary method, what is Ajax's translation gain (loss)?

a) a gain of $294,000

b) a gain of $192,000

c) a loss of $174,000

d) a loss of $12,000

Correct answer C. Please show work. I don't understand the difference between temporal method and monetary/nonmonetary method if there is no balance in Inventory. I thought the answer would be loss of $12,000 (same as if you used temporal method)