P7.9 Translated/Remeasured Trial Balances On January 1, 2019, the U.K. subsidiary of U.S. Interna- tional Corporation had the following condensed balance sheet, in pounds sterling (in millions): Assets Cash and receivables... Inventory (FIFO). Plant assets ............ Accumulated depreciation .... Total assets. 2,000 2,200 1,600 Liabilities and equity Accounts payable....... Long-term debt... Equity ................. 2,100 1,200 2,100 (400) 5,400 Total liabilities and equity ....... 5,400 The exchange rate on January 1, 2019 was $1.20/. Inventory at January 1 was purchased when the ex- change rate was $1.18/. Plant assets at January 1 were acquired when the exchange rate was $1.80/. Plant assets costing 200 million were purchased when the exchange rate was $1.22/. Depreciation of 50 was taken on these plant assets in 2019. At the end of 2019, the subsidiary reported the following trial balance: (in millions) Dr (Cr) Cash and receivables........ Inventory (FIFO).......... Plant assets ........ Accumulated depreciation Accounts payable. Long-term debt.. Equity, January 1 .... Sales........ Cost of goods sold ........ Depreciation expense.. Other operating expenses .. Total ................... 2,660 2,500 1,800 (560) (2,200) (1,100) (2,100) (4,000) 160 840 The ending inventory was purchased when the exchange rate was $1.28/. Sales and other operating expenses occurred evenly over the year. At year-end, the exchange rate was $1.30/, the average for the year was $1.25/. Required a. Prepare the remeasured December 31, 2019 trial balance of the UK. subsidiary, assuming the U.S. dollar is the functional currency of the subsidiary. Assume the remeasured balance of equity on Janu- ary 1, 2019 was $3,196 million. Prepare a schedule to calculate the remeasurement gain or loss for 2019. b. Repeat part a, assuming the pound is the functional currency of the subsidiary. Assume the translated balance of equity on January 1, 2019, is $2,520 million. Prepare a schedule to calculate the transla- tion gain or loss for 2019. P7.9 Translated/Remeasured Trial Balances On January 1, 2019, the U.K. subsidiary of U.S. Interna- tional Corporation had the following condensed balance sheet, in pounds sterling (in millions): Assets Cash and receivables... Inventory (FIFO). Plant assets ............ Accumulated depreciation .... Total assets. 2,000 2,200 1,600 Liabilities and equity Accounts payable....... Long-term debt... Equity ................. 2,100 1,200 2,100 (400) 5,400 Total liabilities and equity ....... 5,400 The exchange rate on January 1, 2019 was $1.20/. Inventory at January 1 was purchased when the ex- change rate was $1.18/. Plant assets at January 1 were acquired when the exchange rate was $1.80/. Plant assets costing 200 million were purchased when the exchange rate was $1.22/. Depreciation of 50 was taken on these plant assets in 2019. At the end of 2019, the subsidiary reported the following trial balance: (in millions) Dr (Cr) Cash and receivables........ Inventory (FIFO).......... Plant assets ........ Accumulated depreciation Accounts payable. Long-term debt.. Equity, January 1 .... Sales........ Cost of goods sold ........ Depreciation expense.. Other operating expenses .. Total ................... 2,660 2,500 1,800 (560) (2,200) (1,100) (2,100) (4,000) 160 840 The ending inventory was purchased when the exchange rate was $1.28/. Sales and other operating expenses occurred evenly over the year. At year-end, the exchange rate was $1.30/, the average for the year was $1.25/. Required a. Prepare the remeasured December 31, 2019 trial balance of the UK. subsidiary, assuming the U.S. dollar is the functional currency of the subsidiary. Assume the remeasured balance of equity on Janu- ary 1, 2019 was $3,196 million. Prepare a schedule to calculate the remeasurement gain or loss for 2019. b. Repeat part a, assuming the pound is the functional currency of the subsidiary. Assume the translated balance of equity on January 1, 2019, is $2,520 million. Prepare a schedule to calculate the transla- tion gain or loss for 2019