1. On January 2, 20X8, Johnson Company acquired a 100% interest in the capital stock of Perth Company for $3,100,000. Any excess cost over book value is attributable to a patent with a 10-year remaining life. At the date of acquisition, Perth's balance sheet contained the following information:

   	Foreign Currency Units (FCU)
   Cash	40,000
   Receivables (net)	150,000
   Inventories (FIFO)	500,000
   Plant and Equipment (net)	1,500,000
   Total	2,190,000
   Accounts Payable	200,000
   Capital Stock	600,000
   Retained Earnings	1,390,000
   Total	2,190,000

   Perth's income statement for 20X8 is as follows:

   	Foreign Currency Units (FCU)
   Revenues from Sales	1,010,000
   Cost of Goods Sold	(590,000)
   Gross Margin	420,000
   Operating Expenses (exclusive of depreciation)	(120,000)
   Depreciation Expense	(200,000)
   Income Taxes	(40,000)
   Net Income	60,000

   The balance sheet of Perth at December 31, 20X8, is as follows:

   	Foreign Currency Units (FCU)
   Cash	180,000
   Receivables (net)	210,000
   Inventories (FIFO)	520,000
   Plant and Equipment (net)	1,300,000
   Total	2,210,000
   Accounts Payable	180,000
   Capital Stock	600,000
   Retained Earnings	1,430,000
   Total	2,210,000

   Perth declared and paid a dividend of 20,000 FCU on October 1, 20X8. Spot rates at various dates for 20X8 follow:

   January 2	1 FCU = $1.50
   October 1	1 FCU = $1.60
   December 31	1 FCU = $1.70
   Weighted Average	1 FCU = $1.55

   Assume Perth's revenues, purchases, operating expenses, depreciation expense, and income taxes were incurred evenly throughout 20X8. Refer to the above information. Assuming the U.S. dollar is the functional currency, what is Johnson's remeasurement gain (loss) for 20X8? (Assume the ending inventory was acquired on December 31, 20X8.)

   		$32,000 gain
   		$36,500 loss
   		$31,000 gain
   		$22,000 gain