On January 2, 20X8, Polaris Company acquired a 100% interest in the capital stock of Ski 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, Ski'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

Ski'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 Ski 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

Ski 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 Ski'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 Polaris's remeasurement gain (loss) for 20X8? (Assume the ending inventory was acquired on December 31, 20X8.)

Multiple Choice

• $31,000 gain

• $22,000 gain

• $32,000 gain

• $36,500 loss

What is the answer?