On January 1, 20X5, Pirate Company acquired all of the outstanding stock of Ship Inc., a Norwegian company, at a cost of $152,400. Ship's net assets on the date of acquisition were 860,000 kroner (NKr). On January 1, 20X5, the book and fair values of the Norwegian subsidiary's identifiable assets and liabilities approximated their fair values except for property, plant, and equipment and patents acquired. The fair value of Ship's property, plant, and equipment exceeded its book value by $19,400. The remaining useful life of Ship's 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. Ship's trial balance on December 31, 20X5, in kroner, follows: Debits Credits NKr 340.000 Accounts Receivable (net) 380,000 740,000 Inventory Property, Plant, & Equipment Accumulated Depreciation Accounts Payable Notes Payable 230,000 NKr 93,000 85000 Retained Earnings 330,000 830,000 Sales Cost of Goods Sold 350,000 240,000 Operating Expenses Depreciation Expense Dividends Paid 64,000 54,000 NKr 2,398.000 NKr2,398,000 Total Additional Information: 1 Shin uses the EIEO method for its inventory The heainning.inventory was acquired on December 31, 20X4 and ending inventory 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. Ship's 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. Pirate's income from its own operations was $295,000 for 20X5, and its total stockholders' equity on January 1, 20X5, was $4,300,000. Pirate declared $240,000 of dividends during 20X5. 6. Exchange rates were as follows: pue 'CYO NKr S July 1, 20X3 December 30, 20x4 1 = 0.15 OX5 July 1, 20x5 1 = 0.19 0.205 December 15, 20x5 December 31, 20x5 1 0.21 Average for 20x5 10.20 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 8000 Accounts Receivable (net) Monetary Liabilities NKr150,000 Accounts Payable Notes Payable 220,000 On January 1, 20X5, the Norwegian subsidiary has a net monetary liability position of NKr66,000. (Amounts to be deducted should be indicated with a minus sign.) U.S. Dollars Norwegian Kroner Exchange Rate 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 0 NKr 0 Exposed net monetary asset position at December 31 Remeasurement loss 0