On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Incorporated, a Norwegian company, at a cost of $151,600. Ships net assets on the date of acquisition were 700,000 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 $18,600. 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 150,000
Accounts Receivable (net)	260,000
Inventory	300,000
Property, Plant and Equipment	660,000
Accumulated Depreciation		NKr 150,000
Accounts Payable		85,000
Notes Payable		297,000
Common Stock		450,000
Retained Earnings		250,000
Sales		750,000
Cost of Goods Sold	350,000
Operating Expenses	160,000
Depreciation Expense	56,000
Dividends Paid	46,000
Total	NKr 1,982,000	NKr 1,982,000

Additional Information:

1. 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 NKr360,000 were made evenly throughout 20X5.
2. Ship acquired all of its property, plant, and equipment on July 1, 20X3, and uses straight-line depreciation.
3. Ships sales were made evenly throughout 20X5, and its operating expenses were incurred evenly throughout 20X5.
4. The dividends were declared and paid on July 1, 20X5.
5. Pirates income from its own operations was $255,000 for 20X5, and its total stockholders equity on January 1, 20X5, was $3,500,000. Pirate declared $160,000 of dividends during 20X5.
6. Exchange rates were as follows:

July 1, 20X3	NKr 1 = $0.15
December 30, 20X4	NKr 1 = $0.18
January 1, 20X5	NKr 1 = $0.18
July 1, 20X5	NKr 1 = $0.19
December 15, 20X5	NKr 1 = $0.20
December 31, 20X5	NKr 1 = $0.21
Average for 20X5	NKr 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 16,000
Accounts Receivable (net)	200,000

Monetary Liabilities
Accounts Payable	NKr 110,000
Notes Payable	200,000

On January 1, 20X5, the Norwegian subsidiary has a net monetary liability position of NKr94,000.

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