Remeasurement of financial statements Assume that your company owns a subsidiary operating in Australia. The subsidiary has adopted the Australian Dollar (AUD) as its functional currency. Your parent company operates this subsidiary like a conclude, therefore, that the functional currency of this subsidiary is the SUS and that its financial state- division or a branch office, making all of its operating decisions, including pricing of its products. You ments must be remeasured prior to consolidation. Following are the subsidiary's financial statements (AUD) for the most recent year: Beginning inventory Purchases Ending inventory. Cost of goods sold Land Building. Accum deprec-building. Equipment Accum deprec-equipment PPE, net. Depreciation expense-building.. Depreciation expense-equipment Depreciation expense.. Income statement: Sales. Cost of goods sold. Gross profit Operating expenses. Depreciation.. Net income. Statement of retained earnings: BOY retained earnings Net income. Dividends Ending retained earnings Balance sheet: Assets Cash..... Accounts receivable Inventory PPE, net Total assets.. Liabilities and stockholders' equity Current abilities. Long-term liabilities Common stock APIC Retained earnings Total liabilities and equity (in AUD) 819,500 2,143,900 (983,400) 1,980,000 718,960 1,320,000 (660,000) 880,000 (440,000) 1,818,960 66,000 88,000 154,000 (in AUD) 3,300,000 (1,980,000) 1,320,000 (704,000) (154,000) 462,000 1,732,500 462,000 (46,200) 2,148,300 939,180 765,600 983,400 1,818,960 4,507,140 559,680 1,304,160 220,000 275,000 2.148,300 4.507,140 The relevant exchange rates for the $US value of the Australian Dollar (AUD) are as follows: BOY rate.. EOY rate.. Avg. rate... Dividend rate Historical rates: Beginning inventory. Land... Building.. Equipment Historical rate (common stock and APIC). $0.83 $0.70 $0.76 $0.71 $0.83 $0.72 $0.72 $0.72 $1.02 a. Remeasure the subsidiary's income statement, statement of retained earnings, and balance sheet into $US for the current year (assume that the BOY Retained Earnings is $1,126,899). Compute the remeasurement gain or loss directly assuming BOY net monetary assets of AUD(564,960), a net monetary liability. b.