On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $151,200. Ships net assets on the date of acquisition were 620,000 kroner (NKr). On January 1, 20X5, the book and fair values of the Norwegian subsidiarys identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ships property, plant, and equipment exceeded its book value by $18,200. The remaining useful life of Ships equipment at January 1, 20X5, was 10 years. The remainder of the differential was attributable to a patent having an estimated useful life of 5 years. Ships trial balance on December 31, 20X5, in kroner, follows: Debits Credits Cash NKr 110,000 Accounts Receivable (net) 220,000 Inventory 260,000 Property, Plant, & Equipment 620,000 Accumulated Depreciation NKr 110,000 Accounts Payable 81,000 Notes Payable 213,000 Common Stock 410,000 Retained Earnings 210,000 Sales 710,000 Cost of Goods Sold 310,000 Operating Expenses 120,000 Depreciation Expense 52,000 Dividends Paid 42,000 Total NKr 1,734,000 NKr 1,734,000 Additional Information: Ship uses the FIFO method for its inventory. The beginning inventory was acquired on December 31, 20X4, and ending inventory was acquired on December 15, 20X5. Purchases of NKr320,000 were made evenly throughout 20X5. Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation. Ships sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5. The dividends were declared and paid on July 1, 20X5. Pirates income from its own operations was $235,000 for 20X5, and its total stockholders equity on January 1, 20X5, was $3,100,000. Pirate declared $120,000 of dividends during 20X5. Exchange rates were as follows: NKr $ July 1, 20X3 1 = 0.15 December 30, 20X4 1 = 0.18 January 1, 20X5 1 = 0.18 July 1, 20X5 1 = 0.19 December 15, 20X5 1 = 0.205 December 31, 20X5 1 = 0.21 Average for 20X5 1 = 0.20 Assume the U.S. dollar is the functional currency, not the krone. Required: Prepare a schedule providing a proof of the remeasurement gain or loss. For this part of the problem, assume that the Norwegian subsidiary had the following monetary assets and liabilities at January 1, 20X5: Monetary Assets Cash NKr 12,000 Accounts Receivable (net) 160,000 Monetary Liabilities Accounts Payable NKr 90,000 Notes Payable 160,000 On January 1, 20X5, the Norwegian subsidiary has a net monetary liability position of NKr78,000. (Amounts to be deducted should be indicated with a minus sign.)

	Norwegian Kroner		Exchange Rate	U.S. Dollars
Exposed net monetary liability position at January 1	NKr
Adjustments for changes in net monetary position during 20X5:
Increases:
From operations:
Sales	NKr
Decreases:
From operations:
Purchases
Operating expenses
From dividends
Net monetary asset position prior to remeasurement at year-end rates
Exposed net monetary asset position at December 31	NKr
Remeasurement loss